Financial markets: supervisory and structural reform: the Draft Financial Services Bill
Ever since the Northern Rock Bank failed in September 2007, the UK financial regulatory authorities have looked at how they operate and whether changes were needed to the existing system. The deepening crisis in 2008 and 2009 expanded the breadth of this review both in the UK and across the world. It is to be expected that firm proposals for new legislation will be forthcoming this year, following a consultation exercise and the publication of an independent Commission's Report headed by Sir John Vickers. This note sets out some of the background and sets out the broad outlines of current government proposals.
Ever since the Northern Rock Bank failed in September 2007, the UK financial regulatory authorities have looked at how they operate and whether changes were needed to the existing system. The deepening crisis in 2008 and 2009 expanded the breadth of this review both in the UK and across the world.
This is a historical summary of the transition from the pre crisis regulatory system to the first proposals for a new system
The Government's proposals have now been published as a draft Bill. The Bill has had its pre-legislative scrutiny in a joint committee of the House. The Committee's evidence sessions suggest that there is broad agreement with the overall thrust of the Bill although specific concerns remain. These include the role of the FPC and the definition of 'financial stability' which it is expected to pursue. Other concerns were raised about the relative importance accorded to consumer protection and about the accountability of the Bank of England.