Maurice Lubbock Lecture

Yesterday, to Oxford, for the Maurice Lubbock Memorial Lecture at the Said Business School, in memory of my father, given by Hector Sants, Chief Executive of the Financial services Authority. I was a virtuoso performance, in which he outlined the FSA's new consumer protection strategy. (www.fsa.gov.uk/pages/Library/Communication/PR/2010/044.shtml), and was followed by an equally coruscating question and answer session.

Why the Tories would transfer the FSA to the Bank of England isn't clear to me. The consumer protection functions of the FSA would go to a new Consumer Protection Agency with its own management, premises and IT system, the cost of which is not quantified in their 'White Paper', and there would also be costs associated with moving the remaining functions to the Bank. Under Mr Sants, the FSA is stronger and better equipped to deal with the set of problems within its remit, so if it ain't broke, don't fix it.

Mr Sants has already announced that he is leaving at the end of his three-year contract in the summer, and the job of finding a replacement can't begin until after May 6 because of the FSA's uncertain future.

Of course, there are other essential steps that must be taken, outside the powers of the regulator, if the risks of future crises are to be reduced. The bloated banks need to be dismembered so that 'too big to fail' never happens again. The obscene bonuses paid to elite bankers must be cut down to size, and there should be an insurance levy on financial transactions, to cover failures, which can never be eliminated altogether.