Calls for an independent risk regulator are on the increase following a statement from Sir Andrew Large, the former deputy governor of the Bank of England. City law firms, such as Eversheds, believe that a stricter regime to assess and monitor financial risk is essential for the industry.

Michael Wainwright (pictured), partner in the financial institutions group at Eversheds, told the S&IR: “The FSA and the Bank of England already had the powers that were needed in order to manage the credit boom; however, they failed to exercise those powers in time to lessen the impact of the crisis. When they did act, the measures implemented attempted to prop up the existing system rather than provide the change that was required.”

In a speech given to industry professionals last month, Large outlined the need for Britain to establish such a body that would provide early warnings of systematic problems and have the tools to discourage excessive borrowing.