GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

UK releases Financial Services Bill

Friday 27 January 2012 - by Karina Whalley


In response to the Treasury Select Committee's recommendation backed up by the Joint Committee on the Bill, it includes a new targeted power of direction over the BoE which the chancellor may use once he has been notified by the central bank governor of a material risk that public funds might be needed in a crisis.

The legislation makes a point to underline the "chancellor's primacy" during these situations.

But the BBA is concerned about the timing of any potential intervention by the chancellor.

Knight said: "The British Bankers' Association believes it is vital to bring the chancellor into crisis management decisions at an early stage - and sooner than the current proposals suggest.


"The Bill has got it right when setting out the responsibilities for all the different crisis management functions but we feel there should be a rethink about the point when the bank involves the chancellor to include situations in which the bank might trigger the Special Resolution Regime," she said.

The UK will not create a standing committee on international coordination for financial services matters, as recommended by the Joint Committee, but will leave this to the relevant bodies themselves.

But the Bill does require that the memorandum of understanding, which deals with international organisations, should establish an international regulatory committee which will report to the chancellor, be chaired by the Treasury and include members from the FCA, PRA and the Bank of England.

The BBA head advised: "The way the financial system copes with crisis also needs to dovetail across the EU so that what happens in the UK is in step with everyone else. Unless we operate the systems in parallel we will end up with two regimes per bank."

The Financial Services Bill has to go before parliament before being passed through as law.


Article pages: |  1  |   2  |



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don't know

View results

FIND A REGION world regions