George Osborne met about 70 staff from the Financial Services Authority (FSA) yesterday to discuss Conservative plans for a new regulatory structure for the City.

The Shadow Chancellor went to the FSA headquarters at Canary Wharf yesterday morning with three colleagues to address regulators about his party’s proposals to shift responsibility for the scrutiny of the financial markets back to the Bank of England.

In a crowded meeting attended by Hector Sants, the FSA chief executive, Mr Osborne said that he had assembled a working group of City experts to advise the Shadow Treasury.

Michael Foot, former executive director of the Bank of England, and Nick Prettejohn, the retired chief executive of Lloyd’s of London, are two of nine advisers to the Tories on regulatory reform.

The move by Mr Osborne and his advisory panel has addressed some of the concerns in the City about the shape of financial regulation under a possible Conservative government. Although Mr Osborne has sought to reassure the FSA that returning regulatory authority to the Bank of England would not be top of a Tory government’s agenda, there are feasibility concerns.

Insurers, for example, are worried that they would be treated in the same way as banks, even though they have different investment strategies and risk profiles.

There are also concerns that there could be a gap, of up to 18 months, between the next general election and any implementation of new regulatory policies if the Tories came to power.

Mr Osborne plans to make the Bank of England responsible for financial supervision, effectively scrapping the FSA. To do this, he would create a third deputy governor of the Bank to be responsible for the banking supervisory function.

It is expected that some of the people working for the FSA would simply become employees of a new subsidiary of the Bank. However, there are worries within the FSA about job losses.

It is expected that a Tory government would offer Lord Turner of Ecchinswell, the FSA chairman, a senior role at the Bank, possibly as the mooted third deputy governor.

Other concerns in the City include how the two institutions would join forces and the remuneration of staff at the two institutions. Many FSA workers earn more than their peers at the Bank because they were poached from well-paid City jobs.

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