The Financial Services Authority has cancelled the annual review of its own effectiveness, despite criticisms of its failure to prevent the near collapse of banks including HBOS and Bradford & Bingley.
According to The Independent, the decision was taken at a board meeting chaired by Lord Turner, who last week presented his review of banking regulation, including reforms of the FSA.
The effectiveness of the board and its main committees have been reviewed every year. External consultants are employed every three years while an in-house assessment is conducted in other years. Most reviews have found deficiencies in the regulator's working or the quality of board decisions.
The review is required by the Combined Code on corporate governance and an explanation of the decision not to hold one this year will have to appear in the FSA's annual accounts to be published in June. The minutes of the board meeting, held at the watchdog's Canary Wharf headquarters, state: "The board agreed that the FSA would not undertake a review of effectiveness of the board and its committees for the year 2008-09".
It was only the third regular board meeting since Lord Turner took over the FSA's chairmanship from Sir Callum McCarthy and a spokesman said: "As last year was a year of transition for chairs it was decided another review now would add little".
A BIG SHIFT IN CONSERVATIVE tax policy was blown into the open by the former chancellor Kenneth Clarke yesterday when he declared that a landmark pledge on inheritance tax is to be downgraded, The Guardian reports.
As rightwingers rounded on David Cameron, who last week indicated that he would not reverse a new 45% top rate of tax, Clarke, the shadow business secretary, warned that raising the inheritance tax threshold to £1m was now just an "aspiration".
George Osborne, the shadow chancellor whose pledge on inheritance tax forced Gordon Brown to abandon an early general election in the autumn of 2007, last night embarked on a damage limitation operation. His spokesman insisted the pledge would be in the party's manifesto for the next general election, though Osborne could only commit to introducing it within the next parliament if the party wins.
Tory sources said the measure would be paid for by taxing "non-doms" or non-domiciled UK residents, though they admitted they would not know how much money this would raise until they form a government and open the Treasury's books.
THE US GOVERNMENT IS TODAY launching a $500 billion (£343 billion) investment programme which will use public and private finance to buy the legacy mortgage assets from banks that are hindering the flow of lending in the financial markets, The Times reports.
The new initiative, called the Public Private Investment Program, will use US Treasury Capital and financing from the Federal Reserve, the Federal Deposit Insurance Corporation as well as money from private investors, to create a fund that will buy the so-called "toxic assets" that are preventing banks from providing more liquidity to the lending markets.
In an article published this morning in the Wall Street Journal, Timothy Geithner, the US Treasury Secretary, said that the funds will be open to participation by a wide range of investors, including pension funds and "will ensure that private-sector participants share the risks alongside the taxpayer".
THE CHANCELLOR RISKS CAUSING long-term damage to the UK economy if he attempts to launch any further fiscal stimulus in next month's Budget, the CBI has warned.
Richard Lambert, the director-general, cautioned the benefits of a short-term fiscal package, such as tax cuts or extra spending, would be limited, while the long-term costs to the UK's battered public finances would be "very real", The Telegraph reports.
The CBI's pleas will add to the pressures Alistair Darling faces in his attempts to find a way to stabilise the economy in the Budget on April 22.
"A further significant addition to borrowing could only exacerbate the pain caused by future fiscal consolidation over a protracted period," Mr Lambert said in the business lobby group's annual Budget submission. "It might simply promote increased saving on the part of households, and greater caution on the part of businesses, in anticipation of future tax bills."
Should the Chancellor rein in spending, this would mark a stark contrast to the US's strategy to solve the credit crisis. Last night, speculation mounted that President Barack Obama was putting the final touches to a trillion-dollar plan to aid the US's crippled banking system.
TAX HAVENS WILL BE forced to submit themselves to international scrutiny under plans to tackle their culture of secrecy being proposed by Gordon Brown, according to The Guardian.
Despite a rearguard action by tax havens, the prime minister intends next week's G20 summit to discuss plans for a multilateral exchange of information on "offshore" accounts.
Brown will also propose using the International Monetary Fund and World Bank to boost the world economy as he seeks to focus on greater international cooperation, rather than divisions between the US and European governments over whether the financial system needs more fiscal stimulus or more regulation.
G20 finance ministers discussed a crackdown on tax havens at their talks last weekend and Brown has told Britain's international partners that he wants to build on proposals from the Organisation for Economic Cooperation and Development (OECD) to "make sure tax secrecy is a thing of the past".IFAonline
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