THE first official review of the work of the Financial Services Authority since it was created will be announced today by Ed Balls, the Treasury’s Economic Secretary.
Mr Balls, Gordon Brown’s leading lieutenant, will announce an inquiry into the FSA’s operation by the National Audit Office during a City seminar also due to be attended by Sir Callum McCarthy, the regulator’s chairman.
It is understood that the NAO will be asked to examine the FSA’s record and effectiveness as the chief City regulator. A review by the audit office will cover five areas of the FSA’s activities, including its internal performance management; its effectiveness in liaising with other UK organisations; its international influence and representation; and its policing of financial crime.
The review will be carried out under powers given to the Treasury under the Financial Services and Markets Act. Treasury sources said it was always envisaged that such inquiries would take place periodically and this one was not a sign that ministers sees particular problems. Mr Balls will emphasise, however, that ministers also believe it important there be no complacency over financial regulation.