Based on the assumption that a new broom will always sweep clean, and the UK financial system is certainly in need of a very large broom, comes the announcement from Shadow Chancellor” George Osborne, who is also active as financial spokesman for the Conservative Party, that the first steps that they would take if and probably when the Conservatives get into power is to dismantle Britain’s system of financial regulation that proved to be highly unsuccessful and return power to the Bank of England, which they claim would avoid a repeat of the current banking crisis.

The Financial Services Authority was established only ten years ago by Gordon Brown when he was UK Chancellor of the Exchequer to act as supervisory role in handling the affairs of the major banks, building societies as well as other major UK financial institutions. It would be a brave man indeed who would say that the FSA covered them in glory during this period, and it would be understandable that David Cameron and George Osborne would like to see the Authority dispatched to the history books.

What Cameron and Osborne would like to see is a return to overall authority of the UK financial system by the "old lady of Threadneedle Street" otherwise known as the Bank of England? Bank Governor, Mervin King is reportedly acting a little coy on the suggestion, but the general impression is that he would be as pleased as anyone to see the FSA disappear of into the sunset.

According to a brief manifesto presented by Messrs. Cameron and Osborne at a Press Conference on Sunday, in addition to the BOE, a Consumer Protection Agency would be formed with the role of handling some of the day to day problems in establishing the new framework.

The Conservatives hope that a new and more powerful central bank would be more capable of monitoring the health of the financial system, as well as setting capital requirements and leverage limits for the banks, and prevent the risk taking, profit hunting and bonus scalping policies of the past that brought the UK banking system to its knees. Only time will tell.

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Tags: Bank of England, British Economy, Chancellor of the Exchequer, Conservative party, Conservatives, Credit Crunch, Financial Services Authority, FSA, George Osborne, Gordon Brown, Money, Recession, UK Banks, UK financial, UK Recession

Estimates have it that by next year, the U.K. will have the unfortunate distinction of being the holder of the largest budget deficit in the developed world, almost entirely reversing the country’s hard earned status as the role model of a successful and wealthy financial services epicenter. A status that she has held for the last decade.

With the UK’s s budget deficit soaring to a staggering twelve percent of gross domestic product, who could now take Great Britain’s role as the key player on the global financial services stage seriously, and with forecasts that it could take at least another ten years to get the country’s finances back into some form of healthy financial situation, it seems likely that the UK financial service industry will be placed on a back burner for years to come.

While no one is confirming the fact that the UK crown has slipped, it is hard to disguise the fact that our credibility has slipped, and at a very crucial time. Jobs in the financial service industry in Great Britain are under serious threat. Tens of thousands have already disappeared as cut backs continue on a widespread basis, and the estimates are that more than 70,000 will disappear till the crisis runs its course

Despite the fact that the UK Treasury has pumped billions of pounds into the Banking and Insurance sectors to prevent a meltdown in the city, there seems a scant chance of a return in confidence any time soon. In order o recover at least some of their investments; the Treasury is demanding a whole new set of standards from the financial institutions. These standards mean that, in any event, dealing with the “city” will be a lot less attractive, it is only reasonable to suspect that the World’s financial movers and shakers may well be taking their business elsewhere.

The financial input from the financial services industry will be sadly missed, contributing almost eleven percent of the UK’s gross domestic product as recently as 2007, more than double of what it was just ten years previously.

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Tags: Banking, Banking and Insurance, British Economy, Credit Crunch, Financial News, gross domestic product, UK Banks, UK financial