After the big bang, the silence. George Osborne may have wowed the City with his promise to smash the Financial Services Authority (FSA) at Mansion House a couple of weeks ago, but what on earth have we leant since then about our new financial regulators?Osborne’s wish is to scrap the FSA by 2012 and hand most of its power to the Bank of England. A new Economic Crime Agency (ECA) will become the serious economic crime-buster (and most likely, take the lead on civil prosecutions), while the Consumer Protection and Markets Authority (CPMA) will regulate financial services companies (and most likely, take the lead on criminal prosecutions). On top of all this will be the Financial Policy Committee (FPC) to monitor economic and financial stability.

On first look, one could be forgiven for thinking that the Serious Fraud Office (SFO), FSA and Bank of England have merely been rebranded, and their powers tweaked a little. This is given a little weight in light of events that followed Osborne’s announcement.

FSA chief executive Hector Sants said in February that he would quit this summer, but (apparently with a little nudge from Osborne) will now stay on to oversee the transition from FSA to CPMA (‘it was my public duty,’ he said). Less than three weeks ago, the FSA held its annual enforcement conference – a glitzy affair in plush conference facilities in central London. Sants and FSA enforcement director Margaret Cole seemed completely unperturbed by Osborne’s announcement the week before, when delivering impassioned speeches about the number of white-collar criminals they’d put in the dock over the last year. Unfortunately, they knew not (or at least, told little) about the future of their organisation.

This week, in the vain hope of finding some answers, I went to magic circle lawyers Allen & Overy for a briefing on regulatory reform. Litigation partner Calum Burnett made the interesting point that the FSA is going through a ‘purple patch’ at the moment in terms of pushing through lots of cases, on the back of a successful clearout of underperforming staff and an influx of skilled investigators. ‘That’s all going to be thrown up in the air,’ he said. But what’s the landscape going to look like in two years’ time? ‘That’s unclear,’ he replied.

Litigation partner Arnondo Chakrabarti said that the SFO has been pushing for new powers for some time. Failing this, it has tried (and failed) to stretch its existing powers . In its probable new, beefed up guise as the ECA, it may well receive these powers following a rewrite of the Financial Services and Markets Act. However, again, Chakrabarti said the muddied waters had not cleared.

Perhaps somebody at the SFO itself had some answers? At a press gathering one evening this week, assembled investigators said over a glass of wine that they, er, didn’t really know what was going to happen – although one who had been on secondment to the FSA did hint that FSA staff are more than a little worried about their jobs. Not so at the SFO, it appeared. Meanwhile, director Richard Alderman remained tight-lipped.

So we find ourselves in one of these unofficial government consultation periods: make dramatic speech and announce the bones of a policy, stay quiet for a bit and listen to the fallout, and then try to iron out any concerns from the market while adding the flesh. In the meantime answers are, unfortunately, few and far between.

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