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Last night’s announcement that George Osborne has effectively decided to abolish the Financial Services Authority (FSA) is a bitter blow to the regulator which has seen a significant increase in convictions over the last few years. Yet again we see a new government bringing a new regulatory environment with more cost, more confusion and more time needed to bed down these potentially enormous changes.

There are differing opinions regarding this particular decision with some believing that the Bank of England should be the focal point of the UK regulatory environment and others adamant that the power should be spread amongst specialist regulators. However, one thing is for sure, Mervyn King is set to become one of the most powerful and most influential central bankers in the world which is a far cry from his situation under the Labour government when many believe that Gordon Brown had been looking to oust him from his position.

It is hoped that lessons have been learnt over the last two years regarding excessive risk and regulation of the UK financial sector but in all honesty it will be difficult for any new regulator to match and better the recent performance of the FSA.

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