It arrived with little fanfare.
On Monday, the biggest shake-up of financial regulation in the UK for a generation came into force, and with it the Bank of England became one of the most powerful central banks in the world.
The previous structure, which had been accused of being “asleep at the wheel” while the UK economy drove straight into financial meltdown, has been scrapped.
The Financial Services Authority has been ditched altogether, while the other two major spokes in the wheel at the time of the banking crisis the Treasury and Bank of England have had their roles altered in a bid to beef up the system.
The new kids on the block are the rather boringly titled Financial Policy Committee (FPC), the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA).
Their task is to ensure the UK’s banks never again find themselves in such a state that they risk the health of the economy as a whole and require billions of pounds in state-aid to keep the doors open.
The FPC’s task in the new structure is to identify risks and nip potential crises in the bud.
The committee has been operating on an interim basis since 2011, has the widest remit of the three new authorities and is chaired by Bank of England governor Sir Mervyn King.
As happened recently, the FPC has the power to demand that banks set more cash aside to ensure they have the resources available to ride out any new financial storms which come their way.
The PRA is the new watchdog for around 1,700 UK-based financial firms such as investment houses and insurers.
New chief Andrew Bailey has said the PRA will be robust in the way it deals with failings and sharp practices within the sector, and it is hoped an increased regulatory presence will lead to greater competition and a better deal for consumers.
The FCA the final element of the new structure, and the only one to sit independently outwith the Bank of England is tasked with identifying and putting a stop to abuses within the financial markets.
The organisation’s remit extends to all financial services firms although it will have a specific role in relation to asset managers and independent financial advisers with an overarching purpose to protect the public against a recurrence of past wrongdoings.
To the outside observer it all sounds well and good.
The Financial Services Authority had to go as it had proven itself incapable of dealing with the gathering storm of 2008, and its impact in the aftermath of the collapse was negligible. It was the proverbial toothless tiger.
So what are the chances of the new system having more success in curbing the excesses of the past?
Only time will tell, but it appears the message has got through to the men in charge of the FPC, PRA and FCA that ‘light touch’ regulation simply will not cut it.
The public still waiting to recoup billions of pounds from our major financial institutions which brought the country to its knees will expect a far more hands-on approach than before.
The new trio of financial regulators have a difficult job to do but their role is vital and they must work together if they are to succeed.
The City simply cannot be allowed to do whatever it likes without its risky excesses going unchecked and its wings unclipped.
ghuband@thecourier.co.uk