Mark Hoban
Main Page: Mark Hoban (Conservative - Fareham)Department Debates - View all Mark Hoban's debates with the HM Treasury
(14 years, 1 month ago)
Written StatementsThe Government have today published a consultation document outlining the coalition Government’s proposals for reforming the framework of financial regulation in the UK. This builds on the statement I made in the House on 17 June 2010.
“A new approach to financial regulation: judgment, focus and stability” sets out in more detail plans to overhaul the UK’s financial regulatory framework, including providing the Bank of England with control of macro-prudential regulation and oversight of micro-prudential regulation.
The UK banking system is emerging from the most serious financial crisis in over a hundred years. Despite making three authorities—the Bank of England (the Bank), the Financial Services Authority (FSA) and the Treasury—collectively responsible for financial stability, the UK’s “tripartite” system failed in a number of important ways. For example, it failed to identify the problems that were building up in the financial system; to take steps to mitigate them before they led to significant instability in financial markets; and to deal adequately with the crisis when it did break.
The document describes the future arrangements for the framework of financial regulation that will address these failings head on. These include proposals to create an independent Financial Policy Committee in the Bank of England and a new prudential regulation authority as a subsidiary of the Bank. In addition to the proposed changes to macro and micro prudential regulation, the consultation document sets out in more detail plans to create a dedicated consumer protection and markets authority (CPMA), with a primary statutory responsibility to promote confidence in financial services and markets.
The document also sets out details of proposals for approaching future financial crises. One of the failings of the UK system currently is the fact that no single institution has the responsibility, authority or powers to monitor the system as a whole, identify potentially destabilising trends and vulnerabilities, and respond to them with concerted action. The document outlines how the Government intend to rectify this.
The document presents a range of issues and questions for consultation. The Government will, on the basis of this consultation and continuing policy development, present more detailed proposals—including draft legislation—for further consultation early in 2011.
The Government intend to introduce legislation to implement their proposals in mid-2011, and in my statement to this House on 17 June 2010 I committed to ensuring the passage of the necessary primary legislation within two years.
A copy of “A new approach to financial regulation: judgment, focus and stability” has been deposited in the Libraries of both Houses and published on the HM Treasury website.