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Monday, March 15, 2010

UPDATE: UK Osborne: BOE Best To Regulate Financial Sector

By Ilona Billington

Dow Jones Newswires

(Adds detail)

LONDON -(Dow Jones)- The Bank of England would be the best body to regulate the U.K.'s financial system as it has the ability to look at the bigger picture, the Conservative Party's treasury chief said in an interview Monday.

Speaking to the BBC, Shadow Chancellor of the Exchequer George Osborne said that following the collapse of Lehman Brothers, which was in part due to complicated accounting practice that was allowed to happen under U.K. rules, regulation needs to change.

"We need a change of approach to regulation," Osborne said. "I think the people best able to bring about that change are the Bank of England because I think they have the ability to take a step back and make bigger judgement calls about how much debt is in the economy and whether or not the bigger picture is one that points to serious risks for the economy."

Osborne added "I find it absolutely bizarre that after the biggest banking crisis since the 1930s...there is no appetite on behalf of the Labour Party to change that system of regulation."

Osborne, when asked about the budget report due March 24, said he believes Prime Mister Gordon Brown's comments that rebuilding the U.K. economy is a choice between investment and cuts is dishonest.

"The budget can't conceal this central fact, which is the country has run out of money and whoever forms the next government must take some very difficult decisions on spending," Osborne said.

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