Tory MP bashes FSA overhaul plan

The Square Mile’s MP has slammed the government’s new blueprint for financial services regulation.

Westminster and City of London MP Mark Field said that the plan to split up the FSA into two new regulators- the Financial Conduct Authority and the Prudential Regulation Authority- would increase red tape burdens on business.

The government is currently consulting on its financial regulation proposals, which are timetabled to be legislated on next year.  

Speaking at a fringe event organised by financial services lobbying group City UK at the Conservative conference yesterday, Field said: “This has not been well thought through, we are going down a very very perilous approach.”

The Conservative MP said there were “great dangers” in the FSA’s move to outcomes-based regulation, which the FCA looks set to follow.

He said: “This will lead to a diminution of innovation which is undesirable and will lead to less competition in the market.”

Field added that it was in the UK’s national interest to support the financial services, given the country’s competitive advantage in the sector.

He was backed by Chancellor of the Exchequer George Osborne’s parliamentary private secretary Greg Hands, who said: “We should be working to build up other sectors rather than knocking banks. The government really needs to look at how it builds up sectors like insurance which was relatively unaffected by the downturn.