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Financial Services: Regulation

Volume 480: debated on Friday 17 October 2008

To ask the Chancellor of the Exchequer what role his Department played in discussions leading to the decision of the Financial Services Authority of 18 September 2008 to prohibit short selling in financial institutions. (227805)

The UK Tripartite authorities, HM Treasury, the Bank of England, and the Financial Services Authority (FSA), have worked, and continue to work, together to take all necessary steps to ensure the stability of the UK financial system. As was the case with previous administrations, it is not the Government's practice to provide details of all such discussions.

HM Treasury welcomes the short selling measures that the FSA has taken against the backdrop of the present turbulence in the markets. The FSA operates within a single legislative framework; independent of Government; separate from the conduct of monetary policy by the Bank of England; and accountable to HM Treasury, Parliament, regulated firms and consumers. The Government do not have a general power of direction over the FSA.