Chancellor George Osborne has said that he will give the Bank of England the role of regulating the financial sector.

It was also announced that the existing regulatory systems, led by the Financial Services Authority, will be dismantled.

"On the structure of regulation, our plan is to hand over to the Bank of England responsibility for macro-prudential supervision, that should never have been taken away from it," said Mr Osborne.

The Chancellor also announced that a commission to look into the possible break-up of the big banks would by chaired by Sir John Vickers, a former member of the Bank of England's Monetary Policy Committee.