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By Ray Fleming

SOMETHING seemed to be missing in the Guardian's front page headline yesterday: “Mervyn King to rein in banking as financial watchdog is scrapped.” What could it mean? Was there a “g” missing in “rein” when the intention had been to imply that the appropriately named King, already Governor of the Bank of England, was going to be sole ruler of Britain's banking community? Or was there a hyphen missing between “rein” and “in” when the point was that King would be concentrating on holding back City excesses and preventing another financial crash?

Perhaps it was a bit of both. By the time that the Chancellor of the Exchequer, George Osborne, had finished his Mansion House speech on Wednesday evening it was clear that the winner in the Chancellor's shake-up of Britain's financial governance was Mr King. He is now set to be the most powerful governor of the Bank of England in living memory. He has been handed the responsibilities of the much criticised Financial Services Authority and will preside over a new financial policy committee with the role of assessing activities in the City. Mr Osborne also announced the creation of what he called a “powerful new Consumer Protection and Markets Authority” designed to “ensure the integrity of the UK's financial markets.” Are these not more-or-less Labour's despised “quangos” with a new coat of Lib-Con paint?