Tories set five-year deadline for regulatory reform

The Conservative Party yesterday said it aims to complete a radical reform of financial services regulation in just five years.

Mark Hoban, shadow financial secretary to the Treasury, told The Financial Times the Consumer Protection Agency (CPA), a proposed replacement for the FSA, would be set up before the end of the next parliament.

However, critics remain concerned about the potential costs and disruption of replacing the FSA with a new regulator.

The Tories have already outlined their plans to shift the FSA's macro-economic responsibilities to the Bank of England, but it was thought any sweeping changes to consumer regulation would not occur until a second parliament.

Hoban said: "Within the first parliament, the CPA will be up and running. We're clear about making rapid change in the least disruptive fashion."

Liberal Democrat shadow chancellor, Vince Cable, says the plans will involve major costs and uncertainty at a crucial time for financial services.