10.I now turn to the question of prudential supervision. Of course this concerns not just the Bank of England, but also the reform of the Financial Services Act. 11.Financial services lie at the heart of a modern, dynamic economy. The effectiveness and competitiveness of all our industries depends on the availability and efficiency of the increasingly wide array of financial products and services, from pensions and insurance to securities and derivatives. Our standard of living depends on them, particularly in retirement.
Financial services are often complex and long term.
Products, markets and advice must therefore be fair, honest, transparent and command confidence. This division is inefficient, confusing for investors and lacks accountability and a clear allocation of responsibilities. Reform is long overdue to simplify the delivery of financial service regulation, and this was a key commitment in our Business Manifesto. At the same time, it is important to preserve the beneficial aspects of the current Act, including practitioner involvement and differential levels of regulation for wholesale and retail business. 13.I can announce today that work is to start immediately on the legislation needed to simplify and reform the regulatory system at an early opportunity.