The FSAs response to the Report on Competition in UK banking

Clive Briault, the FSAs Director of Central Policy, said:

The report makes a number of positive comments on the UKs new regulatory arrangements and is supportive of the new regulatory regime that the FSA is seeking to create. The Financial Services and Markets Act (FSMA) obliges the FSA to have regard to the need to minimise the adverse effects of our regulation on competition and to the desirability of facilitating competition between the firms we regulate. This includes avoiding unnecessary regulatory barriers to entry or business expansion. This should ensure that competition issues are given due weight in our approach to regulation.

The FSA has considered all the recommendations relevant to our functions very carefully and, broadly speaking, we are already either doing what is recommended or considering the recommendations as part of our current work. There are a small number of recommendations that we do not support, where we have said we will keep the issue under review. This is because the recommendations relate to policy on which we have already consulted widely and to change that policy now would not reflect our spirit of openness and transparency.

Competition and the FSMA Competition and innovation considerations play a key role in the FSAs approach to its regulatory responsibilities, including as part of the cost-benefit analysis that underpins the introduction of any new rules. A team of economists provides training and advice to policy makers throughout the FSA on cost benefit and competition issues. In addition, under the FSMA, both the Office of Fair Trading and the Competition Commission will have a role to play in reviewing the impact of the FSA's rules and practices on competition.

Competition and the FSMA

Competition and innovation considerations play a key role in the FSAs approach to its regulatory responsibilities, including as part of the cost-benefit analysis that underpins the introduction of any new rules. A team of economists provides training and advice to policy makers throughout the FSA on cost benefit and competition issues. In addition, under the FSMA, both the Office of Fair Trading and the Competition Commission will have a role to play in reviewing the impact of the FSA's rules and practices on competition.

Notes for editors

1. The FSA sent its response to HM Treasury at the end of June. The FSAs response is being published at the same time as HM Treasurys response.

2. The FSA is the independent body established by Parliament to regulate financial services and protect consumers.

Appended information

The FSA's response to the HM treasury is available from the publications section of our web site. The direct URL is http://www.fsa.gov.uk/pubs/other/response_cruickshank.pdf.