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Yes, M'Lord.

M'Lord, I call Sir Andrew Large.

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From http://www.ft.com/cms/s/0/f2270f72-db6d-11dd-be53-000077b07658.html

Large calls for stronger finance watchdog

By Norma Cohen

Published: January 5 2009 23:07 | Last updated: January 5 2009 23:07

Britain risks a repeat of the current financial crisis unless it establishes a body to tackle systemic risk that is independent enough to stand up to powerful vested interests, a prominent former regulator has warned.

Sir Andrew Large, a former deputy governor of the Bank of England, says that the UK needs an independent body that would provide early warnings of systemic problems and have the tools to discourage excessive borrowing.
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Sir Andrew added in a separate interview with the FT that the government must act quickly to set up a new body as there was a risk that the political will to do so would dissipate once the crisis passed. “In five years’ time it could all be over and everybody will forget,” said Sir Andrew, who was chairman of the Financial Services Authority’s predecessor, the Securities and Investment Board. “If people don’t grasp this nettle now, we will be back here in 25 years’ time.”

Sir Andrew said the new body would have to make it more expensive for banks to increase lending as overall borrowing in the system rose. Sir Andrew said his proposal did not alter the regulatory role of bodies such as the FSA, which would continue to have day-to-day oversight.

In his article, Sir Andrew says that the power of vested interests ranged against such an institution “is intense”.

“In good times, politicians want growth, even if it is debt-fuelled,” he writes. “Banks want profits. Bankers want bonuses. Borrowers and consumers – voters – want to go on borrowing and spending.”

Sir Andrew argues that central banks, such as the Bank of England, are best placed to take on an oversight role because of their perceived independence from the political process. They are best placed to glean market intelligence from each nation’s banking system and are the sole bodies able to create liquidity in financial crises.

“Experience also suggests that people respect central banks that are able and willing to stand up to politicians and governments, as much as the vested interests of bankers and their customers,” he writes.

Copyright The Financial Times Limited 2009