Well he got what he wanted – the FSA is no more. Many people doubted George Osborne’s desire to abolish the FSA but he remained determined to do so. There never was any real row back on this from the moment he published his proposals in Opposition in July 2009.
The clear quid pro quo in the Coalition Agreement was Vince’s Cable’s desire to look at some form of Glass-Steagall for the universal banks – but let’s just see how the Banking Commission chooses to tackle this debate.
So it will mean change for everyone in the sector but the real day to day effect will not be felt for some months on insurance and asset management as the FSA morphs into the new Bank of England Prudential Supervision Division and the Consumer Protection and Markets Agency.
The real political test to come is for the new arrangements to avoid the regulatory arbitrage that occurred within the Tri-Partite structure.
For that not to happen HM Treasury oversight of this new world will need to be bolstered if it is to know just the right questions to ask of the governance of our new financial architecture institutions and those who are running them.
Finally, it is vital that we in the UK, while re-organising our own regulatory furniture, do not lose sight of the debate in Brussels. And that will need real focus – again from HM Treasury.
There will be many eyes watching how HM Treasury does this in the next two to three years.
Having got financial reform out of the way, the next major task is tackling the deficit. While we have had an indication of the cuts to come, this week’s Budget is the first major test for the Government. And I expect the tenor of the Chancellor’s statement to be severe.
He really will want to show international markets that he has a credible plan to reduce the deficit and to get ahead of other EU markets in that respect.
And this will be a real test of nerve for the coalition. Will Lib Dem MPs stay silent on the cuts?
Let’s see if the coming week swaps ‘new’ for ‘old’ politics.
Iain Anderson is director and chief corporate counsel at Cicero Consulting – Financial Sector Government Relations, Regulatory Affairs and information services