Central Banking

UK govt climbdown on payment system regulation

The UK government on Wednesday dropped plans for a new banking regulator to monitor the payments system, and handed responsibility to the Office of Fair Trading, which has general responsibilities for promoting competition.

The decision by the UK Treasury, under Chancellor of the Exchequer Gordon Brown, is likely to be welcomed by the banking industry as the OFT is expected to apply a lighter touch than a dedicated regulator.

It comes just a day after the government reached a compromise deal