FSA expects final operational changes by October
Changes to the UK Financial Services Authority's (FSA) operational structure, prompted by failings in its supervision of Northern Rock, are due to be complete by October 1, the regulator said today.
Internal reforms have been under way at the FSA since July 2007, building on the lessons of the banking crisis, the authority's internal review following the collapse of Northern Rock, and the priorities outlined in the Turner Review of global banking regulation, published in March this year.
The FSA said the changes are expected to better align its internal operating model to its core activities of identifying and mitigating risk, supervision and enforcement. This is primarily to be achieved by merging or restructuring business units.
A new risk division will be established under Sally Dewar, managing director for wholesale markets, incorporating risk identification, risk management and policy formulation, which were previously separate. Meanwhile, the existing financial stability team will be expanded to focus on macro-prudential issues. David Strachan, director of financial stability, will remain in charge.
In addition, supervision of retail and wholesale firms will be combined in one supervision unit under managing director Jon Pain. A new international division will also be set up to increase the FSA's engagement with regulators in other jurisdictions. Verena Ross, the director of strategy and risk, will head this division.
Enforcement and financial crime will be integrated to form one division headed by Margaret Cole, at present the director of enforcement. Meanwhile, a separate financial capability division will be established under the leadership of Chris Pond, the current director of financial capability within the retail division.
See also: Turner condemns 'rent seeking' banks
Northern Rock reports heavy losses in 2008
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