Twin Peaks Approach To Financial Services Needed

5.09.00pm BST (GMT +0100) Tue 13th Jul 2004

Thousands of investors who have lost money through dishonest financial dealings will not thank Conservative plans to shackle the powers of the Financial Services Authority.

Liberal Democrat Shadow Chancellor Dr Vincent Cable MP said: "We need to get back to the original thinking which underlies the establishment of the FSA. This involved a 'Twin Peaks' approach to financial regulation in the UK.

"Regulation of wholesale industry - the City trading in international markets - needs to be secure against financial instability. But it should be light so that growth and enterprise are not stifled. However, it is also essential to have strong consumer protection after the disasters of Equitable Life and Endowment mortgages.

"I am concerned that the Financial Ombudsman is too weak to protect consumers and a number of my constituents have found dealing with the Ombudsman extremely unsatisfactory.

"In its review of financial regulation the Government must strengthen consumer protection with proper provision for final compensation when consumers suffer miserably."