UK releases Financial Services Bill
Friday 27 January 2012 - by Karina Whalley
The Bill seeks to return responsibility for regulating the stability of the financial system to the Bank of England and has given macro-prudential authority to the Bank's Financial Policy Committee in monitoring the financial sector for potential systemic risks.
"The Court of the Bank of England will need to be ramped up and we are pleased people are now talking about strengthening oversight arrangements in light of the Bank's new responsibilities," the BBA head said.
Michael McKee, head of financial regulation at DLA Piper, says that key concerns expressed in pre-legislative talks called for stronger controls over the Bank of England exercising its new powers and greater democratic accountability for the new Financial Policy Committee.
McKee says: "A lot more work has been done to draft in stronger democratic controls over the work of the FPC and to include more information that will come into the public domain.
"It will, however, still remain a very powerful committee which it will be difficult to control democratically in times of crisis. Review of performance will inevitably be after the event."
The Bill also sets out new crisis management rules which have been in need of an overhaul given the failure of the current framework revealed by the financial crisis.
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