FSA anger over critical Blair speech
THE Financial Services Authority is heading for confrontation with Downing Street after demanding an explanation from the Prime Minister for a speech in which he said the City regulator was 'inhibiting' efficient business.
Tony Blair made the comments last week in a presentation to the Institute of Public Policy Research that attacked the over-regulation of many aspects of life in the UK. Although the speech addressed many general problems, such seen teachers becoming unable to take children on school trips, for fear of being sued, it was a specific attack on the FSA that caused most concern at the regulator.
The Prime Minister said the FSA was 'hugely inhibiting of efficient business', in remarks that were later reinforced by the British Bankers' Association which has been critical of the FSA's work in the past.
Callum McCarthy, the FSA's chairman, has written in the past few days to Mr Blair to complain about the remarks which, he said, had undermined its authority.
The Prime Minister's comments come at a particularly sensitive time for the FSA, which is braced for disagreement with the Association of British Insurers, whose members it began regulating earlier this year when it took over responsibility for regulating the insurance industry.
McCarthy is believed to have asked to meet the advisers responsible for drafting the Prime Minister's speech so he could explain the work of the regulator. Downing Street confirmed that it had received a letter from the FSA but said that it stood by the contents of the speech.
