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FSA to recruit 460 new staff to beef up regulatory powers

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City watchdog the Financial Services Authority (FSA) today unveiled plans to hire 460 new staff this year as it looks to toughen up supervision of the financial sector.

The new recruitment drive follows measures put before Parliament last week in the Financial Services Bill to give the FSA statutory powers to ensure financial stability and an enhanced consumer protection role.

The watchdog will increase its workforce by around 14 per cent this year - a move that will see total annual staff costs rise by a further £47.7 million to £350 million.

The expansion plans have been announced in spite of plans announced by the Conservatives to scrap the regulator and instead hand financial supervisory responsibility to the Bank of England.

The watchdog said it needed more and better staff to help it beef up its efforts on regulation, reflecting a more 'confrontational' approach outlined today in its business plan for the year ahead.

FSA chief executive Hector Sants said: 'This proactive approach to supervision requires significantly more people than the old reactive model and those individuals must be of a higher quality and supported by more sophisticated systems.'

The bulk of the new recruits will be employed in a supervisory capacity. Beyond that, there will be 100 new staff in working in enforcement of financial markets and another 100 hired to deal with new European Union insurance regulations.

Today's business strategy announcement also reiterates the action the FSA plans to take in terms of consumer protection. It said last Friday that it will vet products to ensure they are suitable before they go on sale, rather than focusing on helping consumers get redress once problems emerge.

The FSA currently waits for clear evidence that a product has been mis-sold and consumers harmed before taking action.

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