FSA regulation a `burden` on banks

Since the administration of banks and building societies has transferred to the Financial Services Authority (FSA), smaller lenders have been feeling an extra burden, the Confederation of British Industry (CBI) has said.

Increased scrutiny on smaller companies has affected business strategy in a number of areas, a spokesman for the CBI claimed.

Responsibility for banking supervision was transferred to the FSA from the Bank of England in 1998, with the FSA taking over the role of UK Listing Authority from the London Stock Exchange in 2000.

A spokesman for the CBI said: "Clearly what has happened in the UK is that there has been a move from the Bank of England to the FSA to regulate the banks and building societies.

"What we have heard from smaller lenders is that it does represent a greater burden. They are seeing it as a big burden."

In related news, the CBI has welcomed Conservative plans to increase competition in the financial sector, which include reducing corporation tax to 25 per cent.