An expanded coalition government agreement has been published this morning.
Reform of the regulatory system - FSA to continue to supervise banks and insurers
The Bank of England is be given control of macro-prudential regulation and oversight of micro-prudential regulation.
As reported in our Law-Now last week (click here ), it appears that the government will not implement the Conservative's pre-election plan for banks, insurers and other financial institutions to be directly regulated by the Bank of England. It now appears that FSA will continue as the UK's unitary regulator. It remains to be seen how intrusive the Bank of England's "oversight" of FSA's micro-prudential role will be.
Other proposals in respect of financial services include:
- Introduction of a banking levy - with a detailed agreement on implementation.
- Plans for detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector.
- Plans for detailed proposals to foster diversity in financial services, promote mutuals and create a more competitive banking industry.
- Plans to reduce systemic risk in the banking system and with an independent commission to investigate the complex issue of separating retail and investment banking in a sustainable way; the commission will be given an initial time frame of one year to report.
- Creation of Britain's first free national financial advice service, which will be funded in full from a new social responsibility levy on the financial services sector.
- Creation of a single agency to take on the work of tackling serious economic crime (including the current work of FSA, SFO and OFT).
- Regulators to be given new powers to define and ban excessive interest rates on credit and store cards
- Seven-day cooling-off period for store cards
- Credit card companies obliged to provide better information to their customers in a uniform electronic format that will allow consumers to find out whether they are receiving the best deal.
- Introduction of stronger consumer protections, including measures to end unfair bank and financial transactions charges.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 20/05/2010.