The Conservative Party has commissioned an independent review body, which includes former FSA chief executive John Tiner, to look into the burden of regulation.

The review will be led by former head of the Government’s Better Regulation task force Sir David Arculus and will look into where the current regulatory system goes wrong and how it could be improved.

Shadow secretary of state for business Alan Duncan says: "After ten years of Labour, British business is groaning under the weight of an excessive state whose first instinct is to reach for the rulebook and regulate."

"Not only is this mentality frustrating and expensive for businesses, it is also beginning to affect our competitiveness. We need a thorough intellectual overhaul of what has become a very stale area of policy."

Elsewhere, the FSA announces its business plan for 2008/09 on Wednesday.

It has already said it will increase adviser fees by 10 to 15 per cent to cover the cost of TCF, and advisers are hoping there will not be any more nasty surprises in store.
Chancellor Alistair Darling has caused a stir by proposing legislation that would allow the Bank of England to provide confidential emergency liquidity assistance to failing banks.

In Financial Stability and Depositor Protection: strengthening the framework, a joint consultation document by HM Treasury, the Bank of England and the FSA, it says special circumstances may call for emergency help to be kept under wraps.

It says: "The Government recognises that maintaining transparency in financial markets is important and that ELA should therefore be disclosed to the markets at an appropriate stage."

"However, recent events have suggested that there may be special circumstances where, if possible, a period of non-disclosure of ELA is desirable."

There have been mixed reactions to the idea, with some believing it is necessary to curb consumer panic and others arguing that it does not follow the move towards greater transparency.

And the year looks grim for some mortgage intermediaries with the FSA warning they could face pressures on profitability due to declining business volumes.

The regulator’s 2008 Financial Risk Outlook states mortgage intermediaries will be particularly at risk if a combination of pressure on house prices, tighter credit conditions, lower consumer confidence and high levels of personal debt cause a decline in the demand and supply of mortgages in 2008.

It says due to a "significantly less benign" economic environment, a large minority of consumers could experience financial problems due to high levels of borrowing.

It says: "We are concerned that many consumers are ill-prepared for a deterioration in economic conditions and may have placed too much reliance on their ability to depend on cheap credit and housing wealth to sustain their consumption levels and investment plans."

The outlook estimates that repayments for consumers coming off fixed rate mortgages in the next year will rise by £210 per month and says this will have a serious impact on the affordability of loans.

FSA chairman Callum McCarthy says: "Firms and consumers need to recognise there are both short and long term risks and should think about the implications."

Source: Money Marketing