UK’s FSA unveils new structure to beat bank crises

July 2, 2009

Hector Sants, chief executive of the Financial Services Authority (FSA)   LONDON, July 2 (Reuters) – Britain’s Financial Services Authority, the country’s financial market regulator, on Thursday unveiled a new structure designed to help it tackle banking crises more effectively.
   The new organisation includes a beefed-up financial stability division responsible for identifying emerging threats to the financial system, as well as a new international unit which will liaise with other national regulators, the FSA said.
   Regulators and analysts have blamed the crisis which shook the global banking sector in September last year in part on a lack of “macro-prudential” analysis focusing on how new trends in financial markets could undermine the stability of the whole financial system.
   The FSA is also planning to bring together all its risk identification and management functions in a single Risk division, and merge its retail and wholesale monitoring units into a new Supervision business.
   “These changes will provide greater clarity, both internally and externally, to the way we work and, in particular, reinforce our role as micro-prudential supervisor based on a model of integrated risk analysis and integrated supervision,” FSA chief executive Hector Sants said in a statement.
   The watchdog said in March that it had hired 280 extra staff to spearhead a more “intrusive” style of regulation in response to the 2008 banking crisis, which forced the government to partly or wholly nationalise three major British lenders left unable to fund themselves as global credit markets shut down.
   The new organisational structure will be in place by Oct 1, the FSA said.

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