There should be a greater level of "productive overlap" between the Bank of England and FSA on financial supervision, according to a Government report on regulatory reform.
It added: "As to the allocation of tasks between the FSA and the Bank of England (and whether different structures would have made meaningful difference to the current crisis), we support a greater degree of "productive overlap" on financial stability and prudential supervision between the two bodies. For this to be effective in future, we would encourage a closer relationship between the FSA and the Bank, and we emphasise the need to continue to build this relationship.
"We believe the financial and managerial costs of major change at the current time is not warranted. We strongly believe that a "quadripartite" system - a four-way division of tasks created by splitting of the FSA into a prudential supervisor and a markets supervisor, working with the Bank and HM Treasury - would be inappropriate and unstable."Mortgage Solutions
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