As predicted on this site, George Osborne has sounded the death knell of the ineffectual and inept FSA (ironically, despite its lousy performance, FSA staff were paid nearly £22M in bonuses last year).
Osborne has stated that it will cease to exist in its current form, and a "Consumer Protection and Markets Authority" will be created.
Hector Sants, the CEO of the FSA, will stay to become the new deputy governor and chief executive of the new regulator. That announcement is to be treated with a degree of scepticism. The new body will be considerably less powerful than the FSA, and it is likely that as soon as the transition has occurred Sants will depart (as this in effect a demotion).
The widely derided tripartite system, set up by Brown, is to be terminated and the Bank of the England given wide ranging powers to prevent another financial crisis; ie the Bank is now in charge of regulation.
The Bank will become one of the most powerful regulatory bodies in the world, with responsibility for both monetary policy and financial regulation.