UK: financial stability and the tripartite model - Sir James Sassoon's report

Last year the Shadow Chancellor of the Exchequer, George Osborne, commissioned Sir James Sassoon to conduct an independent review of the tripartite system of financial regulation. Sir James' report was published today and is available here. Sir James writes in today's Financial Times newspaper:

I want to kick start the debate on what a new UK framework to protect financial stability should look like. In other countries this debate is already well under way. The US Treasury produced a blueprint for a new regulatory system last year. Jacques de Larosière has been reviewing the structure of European financial regulation. However, the UK authorities have yet to bring forward ideas on how fundamental parts of the system should be reformed. Stronger international regulation is undoubtedly needed. But it is UK taxpayers’ money that is deployed to sort out any crisis, and it is the UK authorities who must be the main guardians of our financial stability. In order to protect our economy and the taxpayer, the new domestic framework must have prudential regulation at its core. One of the most important lessons from the crisis is that we need greater focus both on the macro-prudential (the risk across the system) and the micro-prudential (the risk in individual institutions). But we must not do this in a way that weakens regulation aimed at consumer protection".