Financial Secretary to the Treasury, Mark Hoban MP, said:  "The Coalition Government is delivering on its commitment to reform the financial system, to avoid repeating the mistakes of the recent financial crisis and to ensure that taxpayers are protected.  Today is a crucial milestone in our programme of reform. To take this forward, we would welcome the input of everyone who has an interest, including regulators and the regulated community, to ensure that we get the design right.”

The consultation, which will close in October 2010,  seeks views on the composition of the new financial regulatory architecture, including the scope, objectives, powers, and governance arrangements for the new regulatory bodies (the financial policy committee, the prudential regulation authority, and the consumer protection and markets authority), and issues concerning the relationship between them, said the Government in a release.

“The FSA will retain its current responsibilities throughout the transition period, although a new interim Financial Policy Committee will be established in the autumn on a non-statutory basis. The FSA intends to move to separate conduct and prudential regulation in shadow form in the first quarter of 2011,” it added.

The consultation invites views on this proposal in addition to plans to create: a new prudential regulator under the control of the Bank of England headed by a new Deputy Governor ; a new Consumer Protection and Markets Authority (CPMA) to act as a single integrated regulator focused on conduct in financial markets.