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Categories: Regulation| Economics / Markets
Topics: George Osborne| Treasury| Bank of England| Parliament| banks
The Treasury today published the Financial Services Bill, which when passed will enshrine the new regulatory structure in law.
Unveiling the Bill at Davos, Chancellor George Osborne said it will give him the power to order the Bank of England (BoE) to act in a financial emergency.
It will also give the new Financial Conduct Authority (FCA) the power to ban products for 12 months without consultation, as announced by Martin Wheatley, the new head of the FCA, earlier this week.
The Chancellor's new power will prevent another crisis such as the Northern Rock (NRock) fiasco in 2007, Osborne said.
During the 2007 crisis, Chancellor Alistair Darling found he did not have the legal authority to order the BoE to bail out NRock.
Osborne also said the Bill will enshrine the government's authority to seize a struggling bank to protect financial stability.
In a wider context, the Financial Services Bill officially creates the FCA and its sister bodies the Financial Policy Committee (FPC) and the Prudential Regulatory Body (PRA), all of which will be part of the BoE.
The new regulatory structure will replace the FSA from this year.
The Bill will amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009.
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When is an emergent not a disaster
Given the economy is up the creek without a paddle, we have a Chancellor and PM who have never done a proper job and know nothing about business or regulation yet love to talk about it thes excesses when it has only been UK government who have gold plated EU regulations The question needs to be asked at point point exactly does a disaster become an emergency? I suspect Mr Osborne hasn't a clue either.
Posted by: Robert Marshall
Rule by Dice
The UK has a fetish about being ruled by people who know as little a possible about their jobs, e.g. Civil Servants are constantly moved around departments to avoid becoming experts; Ministers are moved around Ministries before their sins find them out. So there should be no surprise that some of the most amateurish politicians for some time want to ensure that amateurs stay in charge. What we don't know, and probably never will, is whether professionals would do a better job, or merely a better job of covering up. Perhaps we should have rule by chance. Put a few selected options into a computer; run a random number program and just go with the result. I doubt we would even spot the change.
Posted by: Glen McKeown
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Blind Leading Semi Defunct
So, interest rate decisions will be taken away from an 'independent panel of experts' - or as is now generally recognised 'a bunch on ignorant numpties', and given to a politician, who as we all now know cannot be trusted as far as we can spit a rat and is even more spectacularly ignorant than the Bank of England. Yeah. That's going to work. Not.
Posted by: Steven Farrall