This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8140457.stm
The article has changed 15 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Banks to face tougher regulation | |
| (10 minutes later) | |
| UK banks will face tougher regulation and consumers will get more protection, under reforms to the financial system proposed by the chancellor. | UK banks will face tougher regulation and consumers will get more protection, under reforms to the financial system proposed by the chancellor. |
| Alistair Darling said the Financial Services Authority (FSA) would have tougher powers to deal with risk-taking in banks and penalise misconduct. | Alistair Darling said the Financial Services Authority (FSA) would have tougher powers to deal with risk-taking in banks and penalise misconduct. |
| The current scheme to compensate savers would be improved, he added. | The current scheme to compensate savers would be improved, he added. |
| Shadow chancellor George Osborne said the reforms were "a totally inadequate response" to the financial crisis. | Shadow chancellor George Osborne said the reforms were "a totally inadequate response" to the financial crisis. |
| Mr Osborne also called for more powers for the Bank of England. | Mr Osborne also called for more powers for the Bank of England. |
| Consumer protection | |
| Mr Darling said the financial system needs to ensure robust regulation, and banks and financial institutions should be better managed. | Mr Darling said the financial system needs to ensure robust regulation, and banks and financial institutions should be better managed. |
| Some of the key proposals included: | Some of the key proposals included: |
| • More help for consumers - a national money advice line funded by the banks and a strengthened deposit protection scheme | • More help for consumers - a national money advice line funded by the banks and a strengthened deposit protection scheme |
| READ THE TREASURY REPORT | |
| Treasury report: Reforming financial markets (2.08Mb) Most computers will open PDF documents automatically, but you might need to download Adobe Acrobat Reader. | |
| Download the reader here | |
| • Greater competition - with the FSA and Office for Fair Trading ensuring that new players can enter the banking market | • Greater competition - with the FSA and Office for Fair Trading ensuring that new players can enter the banking market |
| • Executive pay - the FSA to report yearly on whether banks have met the new code of conduct on remuneration, and bank boards to be strengthened | • Executive pay - the FSA to report yearly on whether banks have met the new code of conduct on remuneration, and bank boards to be strengthened |
| • Tougher banking regulation - banks required to hold more capital and more powers for regulators to take over failing banks | • Tougher banking regulation - banks required to hold more capital and more powers for regulators to take over failing banks |
| • A new Council for Financial Stability - made up of the FSA, the Bank of England and the Treasury to meet regularly and report on the systemic risks to financial stability. | • A new Council for Financial Stability - made up of the FSA, the Bank of England and the Treasury to meet regularly and report on the systemic risks to financial stability. |
| 'Culture change' | |
| "We also need banks and institutions that are better managed," Mr Darling said. | |
| "We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability, and not on short-term profit. | |
| "The FSA now has powers to penalise banks if their pay policies create unnecessary risks, and are not focused on the long-term strength of their institutions." | |
| Liberal Democrat Treasury spokesman Vince Cable expressed disappointment that the proposals preserved "a fragmented system" of responsibility. | |
| He also called for very large banks to be sub-divided, given their risk to the financial system. | |
| The British Bankers' Association (BBA) said banks recognised the need for change and would continue to work with authorities to ensure the "long-term success of the UK economy and the banking sector". | |
| "We believe appropriate and effective regulation, capital applied according to risk and good quality supervision are the cornerstones of a vibrant banking community, " said BBA chief executive Angela Knight. | |
| "We welcome moves to create better coordinated financial stability jointly with the FSA and the Bank of England." |