A new approach to financial regulation: securing stability, protecting consumers
The Stationery Office, Jan 27, 2012 - Business & Economics - 121 pages
This document accompanies the introduction into Parliament of the Financial Services Bill (HC Bill 278, session 2010-12, ISBN 9780215039545 and Explanatory notes Bill 278-EN, ISBN 9780215039132) and explains the Government's final proposals to reform the failed system of financial services regulation. These proposals follow on from extensive consultation, and a draft of the Bill was subject to pre-legislative scrutiny by a Joint Committee (report published as HL Paper 236/HC 1447, ISBN 9780108474064). This document details the main changes the Government is making to the Bill. Chapters cover: Bank of England and Financial Policy Committee; Prudential Regulation Authority; Financial Conduct Authority; regulatory processes and coordination; European and international regulation. Annexes include the Government's responses to the Joint Committee and to the Treasury Committee's inquiries into financial services regulation. The core proposals are: to establish a strong and expert macro-prudential authority, the Financial Policy Committee within the Bank of England to monitor and respond to systemic risks; to transfer responsibility for micro-prudential management of firms that manage complex risks on their balance sheets to a focused new regulator, the Prudential Regulatory Authority; and to provide for a focused new conduct of business regulator, the Financial Conduct Authority, to ensure that business across financial services and markets is conducted in a way that advances the interests of all users and participants. In any future crisis it will be clear that the Chancellor of the Exchequer is in charge. Regulation of consumer credit will be brought within the remit of the Financial Conduct Authority.
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Bank of England and Financial Policy Committee
Prudential Regulation Authority
Financial Conduct Authority
Regulatory processes and coordination
European and international regulation
Annex B Government response to the Treasury Select Committee
5 Summary of responses to consultation
Annex E IOU on crisis management
Annex F MOU on international organisations
accountability amended approach appropriate Bank of England Bank's Chancellor changes Committee's recommendation competition consider consumer credit consumer groups coordination Court crisis management decisions draft Bill Draft Financial Services dual-regulated firms duty effective ensure FCA's financial crisis Financial Ombudsman Service financial regulation financial sector Financial Services Authority Financial Services Bill financial stability FPC's FSCS FSMA Government agrees Government believes Government notes Government's Governor impact assessment implementation important industry respondents investment firms issues Joint Committee recommends judgement-led macro-prudential tools material risk Memorandum of Understanding notification number of respondents objective ongoing option Paragraph Parliament power of direction PRA and FCA PRA's proposed public funds published reforms regulatory relevant remit responsibility risk to public role secondary legislation significant statutory supervision Supervisory Board systemic risks threshold conditions transitional costs Treasury Treasury Committee Treasury Select Committee Treasury's TSC's UK authorities welcomed