CLLS has responded to Treasury's paper on financial regulation. It notes several potential difficulties with the proposed division of responsibilities between two regulators and the co-ordination of processes. It notes recent experience has led most people to acknowledge the descriptions "prudential" and "conduct" are often different aspects of the same regulatory territory. It thinks changes to the primary and secondary legislation, and the rules of the two new authorities, will be unnecessarily complex as a result. It notes the potential duplications, inconsistencies and different responsibilities of the regulators, which it thinks may diminish the effectiveness of regulation. It also makes the point made by most industry respondents that the UK's power in Europe is likely to be weakened as the two new regulators do not map neatly across to the new European supervisory bodies.