In autumn 2008, Britain's banking system came perilously close to collapse. To avert catastrophe, the Government was forced to step in with multi-billion pound bailouts. Many factors led to this crisis including failings in financial supervision and fuzzy allocation of responsibilities for preventing and managing systemic crises. The draft Financial Services Bill (printed as chapter 5 of 'A new approach to financial regulation: the blueprint for reform' (Cm. 8083, June 2011, 9780101808323) is aimed at preventing such a potentially calamitous systemic failure of the financial sector occurring again. It proposes far reaching changes to the regulatory structure, replacing the tripartite system of financial regulation with a twin peaks model. The Joint Committee's recommendations are intended to ensure that the new regulatory authorities have the right objectives, powers and responsibilities and systems of accountability which will be essential to make them effective.
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.
The Financial Services Bill is the most important overhaul of financial regulation ever undertaken in this country. The work of the Treasury Committee and the Joint Committee has secured improvements in some areas. They have also gained a commitment from the Government to look again at the Bank of England's current antiquated corporate governance, and its accountability to Parliament. The Bank must not be permitted to carry on with an outdated Court. Instead of drafting a fresh Bill, the Government has presented Parliament with multiple amendments to the already extremely complex Financial Services and Markets Act. The proposed legislation is therefore much more complicated than it need have been. Some of the key issues and recommendations include: that, the Court of the Bank of England should be given the statutory duty to undertake retrospective reviews of the Bank's performance; that, when public funds are at risk, the Chancellor of the Exchequer should be given the general power to direct the Bank of England; whether the Treasury Committee should have a role in the appointment and dismissal of the Governor of the Bank of England; amending the Bill to make competition an objective of the Prudential Regulation Authority; examining whether there is a way of requiring the Financial Conduct Authority in legislation to publish board minutes while not setting a precedent on the degree of intervention in how boards function; amending the Bill to ensure that Parliament may request retrospective reviews of the Financial Conduct Authority's work
In its final report the Independent Commission on Banking (ICB) recommended a package of measures, consisting of ring-fencing vital banking services and increasing banks' loss-absorbency. The Government strongly supports the ICB's objectives and dual approach. The Government agrees that vital banking services - in particular, the taking of retail deposits - should only be provided by 'ring-fenced' banks', and that these banks should be prohibited from undertaking certain investment banking activities. On increased loss-absorbency, also supported are the ICB recommendations for higher equity requirements for large ring-fenced banks, a minimum leverage ratio, loss-absorbing debt, insured depositor preference and higher levels of loss-absorbing capacity for banks that are difficult to resolve. With regards to the principle that systemically important banks hold a minimum about of loss-absorbing capacity on a group-wide basis, however, the requirement should not apply to non-UK operations where it can be shown that those operations to do not pose a risk to UK financial stability. The Government also believes that depositor preference needs further analysis and consultation. On competition, the Government also strongly supports all the ICB recommendations. The Government estimates the aggregate private costs to UK banks at £3.5bn - £8bn, producing a gross reduction in GDP of £0.8bn - £1.8bn. Against these costs though should be set the potentially much larger benefits with the ICB's recommendations yielding an estimated incremental economic benefit of £9.5bn per annum. Significantly too the Government wants to see relevant legislation completed by the end of this Parliament in May 2015 as opposed to the ICBs recommended 2019
Drawing on reports from committees, evidence from outside observers and academic research, this report concludes that two years after the general election and the Wright reforms, the evidence is "broadly encouraging" - although committees face some obstacles and there is room for improvement. The "old doctrine by which ministers alone are accountable to Parliament for the conduct of their department is being stretched to implausibility and there is a need for a changed approach. It recommends that the Government engage with the Liaison Committee in a review of the relationship between Government and select committees with the aim of producing joint guidelines for departments and committees, which recognise ministerial accountability, the proper role of the Civil Service and the legitimate wish of Parliament for more effective accountability. The report also makes numerous recommendations for Committees, including: that they be forward-looking in scrutiny of departmental performance, devoting less effort to raking over the coals of past events unless there are lessons to be learnt; give more attention to the financial implications of departmental policy and how departments assess the effectiveness of their spending; experiment with different approaches to evidence-taking, broaden the range of witnesses, and make more use of commissioned research; follow up recommendations to ensure that reports have impact and report to the House at least once each Session on what has been done The Committee intends to ask the Backbench Business Committee for time for a debate in the House of Commons on a motion endorsing its conclusions and recommendations
This Treasury Committee report into the Financial Conduct Authority (FCA) contains a number of recommendations for the Government's consideration ahead of the drafting and publication of the Financial Services Bill early in 2012. Among the recommendations are: (a) that the Government should legislate to give the FCA a primary objective to promote effective competition for the benefit of the consumer (in line with the thinking of the Independent Commission on Banking and the Office of Fair Trading); (b) the Government must put competition at the heart of the new regulatory framework; (c) that the FCA develops far more reliable estimates, in collaboration with the industry, of its own cost effectiveness; (d) that the Government differentiates between retail and wholesale consumers; (e) that both the FCA and the financial services industry make better efforts to communicate with each other; (f) that the current legislative proposals be revised to ensure that the FCA is properly accountable to Parliament and that tools are available to enable the required level of explanation from the regulator.
The Financial Policy Committee (FPC) is to be established under the Financial Services Bill, currently going through Parliament. The Committee will be charged with identifying, monitoring and addressing risks to the financial system as a whole, as well as supporting the Government's economic objectives. An interim Financial Policy Committee was set up in advance and was asked to evaluate and recommend potential macro-prudential tools that the statutory FPC could be given powers to direct the regulators to implement. Those recommendations were submitted in March 2012. This document describes macro-prudential regulation and the role of the FPC, and sets out the Government's proposals for the FPC's initial toolkit. The powers are designed to allow the FPC to mitigate risks to systemic stability. The two primary powers will be powers of recommendation and powers of direction. A draft of the statutory instrument that will establish the toolkit is included, along with a draft of the impact assessment that will accompany it.
The focus of this report is on the voluntary or not-for-profit organisations which are charities, and other organisations with charitable, philanthropic and benevolent purposes, many of which raise funds from the public including campaign groups. The Draft Bill aims to modernize charity law, allowing many campaigning and social justice groups to attain charitable status. In England and Wales 188,739 charities are registered with the Charity Commission, with a total income of £32 billion raised by the major charities. There are 471 charities, 0.29 per cent of those registered, which represent 45 per cent of the total income, two-thirds of charities actually have an income of £10,000 or less. The Joint Committee sets out 54 recommendations and conclusions, among them are: that the Bill should include a definition of religion; that there should be an additional charitable purpose of promoting religion, racial harmony and advancement of culture; that an account should be taken of the loss of assets to a charity, if it loses charitable status; that an independent review should look at the burden of regulation that charities face; that the Charity Commission should inform the charities the reason for any investigation and that compensation and costs can be awarded against the Commission.
A report that provides an overview of the Committee's work during the 2008-09 parliamentary session and draws attention to improvements to the human rights landscape in the UK which it has commended in reports during the year. It also mentions a number of continuing areas for concern.
This report, from the Select Committee on Modernisation of the House of Commons, presents the first inquiry into the Governance of Britain, all issued as Command Papers and published in 2007: (Cm. 7170, ISBN 9780101717021; Cm. 7175, ISBN 9780101717526; Cm. 7192, ISBN 9780101719223; Cm. 7210, ISBN 9780101721028; Cm. 7231, ISBN 9780101723121; Cm. 7235, ISBN 9780101723527; Cm. 7239, ISBN 9780101723923). It considers Parliament's role in scrutinising the proposed legislative programme, including arrangements for publication and debate as well as wider consultative strategies. The Committee has set out a number of conclusions and recommendations, including: the Committee believes that the use of plain English in the Draft Legislative Programme is to be commended, and the Government should consider extending the approach to programmed Bills on a trial basis; that the Government's main non-legislative plans should be included in the Draft Legislative Programme, alongside the list of proposed bills, in order that a full programme of government is available for scrutiny; that there is a benefit to be derived from the presentation of the Government's legislative programme as a whole and that the Draft Legislative Programme should be published earlier in the year, preferably before Easter, so that select committee scrutiny and public consultation can be carried out more effectively; that the Draft Legislative Programme should be the subject of a separate debate in Parliament.
This Report responds to the Government's initial proposals for radical change to economic policy-making and the way in which financial services are regulated in the United Kingdom. The Governor of the Bank of England's concern is that 'people are trying to get to an end point too quickly'. The Government's reforms are taking place at a time when major changes are being proposed internationally. It is important that the United Kingdom, with a particularly large share of the financial services activity of the EU, secures proper representation on the EU regulatory bodies. The Government has set up an Independent Commission on Banking, to look at competition in banking, with a remit which could include radical structural reforms, due to report in the autumn. The Government also proposes to give a Financial Policy Committee (FPC), based in the Bank of England, power to monitor the system to ensure financial stability, and to take action when that stability is threatened. The Government further proposes to establish a prudential regulator, the Prudential Regulation Authority, as a subsidiary of the Bank of England. The Consumer Protection and Markets Authority (CPMA) will regulate the conduct of financial institutions. The financial crisis has resulted in a sharp increase in the direct costs of regulation. The indirect costs have doubtless increased further, although they remain difficult to quantify. Both are borne by the consumer. The Treasury Committee is concerned that the proposals say little about the cost of regulation, or about the non-bank sector. Regulatory changes should not be considered without proper evaluation of both their direct and indirect costs.
The Government has not fully thought through the implications of its social care reforms and may leave local authorities open to a deluge of disputes and legal challenges. MPs and Peers warn that without greater integration with health and housing, and a focus on prevention and early intervention, the care and support system will be unsustainable. The Committee also calls for a nationwide campaign to educate people about the need to pay for their own care, saying that adult care and support are poorly understood. Key recommendations include: a new power to mandate joint budgets and commissioning across health, care and housing, such as support for the frail elderly, making it simpler for NHS and local Councils to pool budgets; fast-tracking of care and support assessments for terminally-ill people; new legal rights for young carers to protect them from inappropriate caring responsibilities and ensure they get the support they need; an obligation on the Secretary of State to take into account the draft Bill's well-being principle when designing and setting a national eligibility threshold; independent resolution of disputes over decisions about care and support - and costs that count towards the cap - through a Care and Support Tribunal. In addition, the Committee makes a number of recommendations to improve health research and the education and training of NHS workers. The Committee also warns that restricting support and care to those with the highest levels of need will simply shunt costs into acute NHS care and undermines interventions to prevent and postpone the need for formal care and support.
This report identifies issues arising from the FSA's report into the failure of RBS that may merit further legislative or regulatory change. The report also considers the value of the reporting process for understanding the causes of RBS's failure and for ensuring that appropriate lessons have been learnt. The Government should include an explicit requirement for the Prudential Regulation Authority to approve major bank acquisitions and mergers in forthcoming legislation and the Treasury should report on the legislative or other changes it proposes to make to the current regime regulating acquisitions in the banking sector. The Bank of England has still to produce a comprehensive review of the Bank's role in, and response to, the crisis. Any lessons learned will only be available at a very late stage in Parliament's consideration of the Financial Services Bill, when incorporation of them into legislation may be more difficult. The Parliamentary Commission on Banking Standards should examine the PRA's approach to banking supervision. The Government should consult on whether additional legislation is required to ensure that directors or other senior executives of failed banks cannot work in other regulated industries in future, or to make the system more certain. The Committee supports attempts to remedy the misalignment of incentives embedded within the financial services framework. The introduction of strict liability would be a major change to the existing legal framework and would require full public debate. The Parliamentary Commission on Banking Standards should examine this and other options.
Parliamentary privilege ensures that Members of Parliament are able to speak freely in debates, and protects Parliament's internal affairs from interference from the courts. Following (failed) attempts by some MPs to use parliamentary privilege to avoid prosecution for expenses fraud, the Government felt the time was right for a comprehensive review of the privileges of Parliament. Freedom of speech is arguably the most important privilege: a member must be able to speak or raise a matter without fear of a criminal or civil liability. The Government does not feel it necessary to change the protection of privilege in civil cases, nor in relation to injunctions or super-injunctions. But it is open to question whether parliamentary privilege should ever prevent members being successfully prosecuted for criminal offences. The paper consults on whether privilege should be disapplied in cases of alleged criminality, though not in respect of speeches in Parliament. The second major privilege is that of exclusive cognisance: the right of each House to regulate its own proceedings and internal affairs without interference from any outside body including the courts. This includes the conduct of its Members, and of other participants such as witnesses before select committees. Recent court judgments make clear that statute law on employment, health and safety etc do apply to Parliament providing the law would not interfere with Parliament's core functions. The green paper also consults on extending and strengthening select committee powers. A final section covers other miscellaneous privileges.
The draft Bill and White Paper were included in Cm. 7342-I,II,III (ISBN 9780101734226) which follows the Green paper issued in July 2007, Cm. 7170 (ISBN 9780101717021) and various other Governance of Britain papers
Banking reform is the second key pillar of the Government's programme for reform of the financial sector to address the weaknesses exposed by the financial crisis of 2007-09. The first pillar of this programme, reform of financial services regulation, has been legislated in the Financial Services Act that received Royal Assent in December 2012 (2012 Ch. 21, 9780105421122). The Government is now legislating to reform the structure of the UK banking system, through the Financial Services (Banking Reform) Bill (HCB 130, session 2012-13, ISBN 9780215053794) which implements key recommendations of the Independent Commission on Banking, including ring-fencing retail deposits from wholesale banking activities and depositor preference. This document accompanies introduction of the Bill and includes the Government response to the first report of the Parliamentary Commission on Banking Standards (PCBS), which conducted pre-legislative scrutiny on the draft Bill. The response explains where the Government has amended the Bill and includes and impact assessment for the Bill, along with the opinion of the independent Regulatory Policy Committee
The Commission's report examines the options for ensuring adequate post-legislative scrutiny of Acts of Parliament, in the light of the recommendation of the House of Lords Select Committee on the Constitution (in their 14th report, HCP 173-I, session 2003-04; ISBN 0104005416). The main focus of the report is on primary legislation, but it also considers delegated legislation and European legislation. Issues discussed include: existing forms and benefits of post-legislative scrutiny in the UK Parliament and in other jurisdictions (including Canada, Australia, Germany, France and the EU); the experience of pre-legislative scrutiny; and options for post-legislative scrutiny mechanisms. A number of consultation questions are given, and responses should be received by 28th April 2006.
This document contains a range of written evidence submitted to the joint inquiry by the Home Affairs Committee and the Work and Pensions Committee, in relation to the Governments proposals to reform the law on corporate manslaughter, as set out in the draft Bill (Cm 6497, ISBN 010164972X) published in March 2005 for consultation.
The Terrorism Act 2000 (Remedial) Order 2011, an urgent remedial order concerning exceptional counter-terrorism powers to stop and search without reasonable suspicion was made by the Home Secretary on 17 March 2011 and came into force on 18 March 2011. The purpose of the Order is to remove the incompatibility of the current statutory powers to stop and search without reasonable suspicion (in sections 44 to 46 of the Terrorism Act 2000) with the right to respect the private life in Article 8 of the European Convention on Human Rights ("ECHR"). The Joint Committee on Human Rights accepts the necessity of introducing a replacement stop and search power and agree with the Government there are compelling reasons for using the remedial order procedure. It does provide for much greater parliamentary scrutiny, but the Committee does recommend that the Government provides more detailed evidence of the sorts of circumstances in which the police have experienced the existence of an operational gap in the absence of a power to stop and search. Without such detailed scrutiny it is difficult for the Committee to reach a view as to the appropriateness of proceeding by urgent remedial order. The Committee also recommends that the Order be replaced with a new Order modifying the provisions and removing the incompatibility identified by the ECHR.
The report of the Leader's Group examining the working practices of the House of Lords and the operation of self-regulation was published today (Tuesday 26 April). Recommendations in the report include changes to enable the Lords better to fulfil its core functions of scrutinising government, testing out and reviewing legislation, and debating important issues. The report also suggests ways in which the House of Lords could make the most of its unique strengths and resources, including its Members' skills and experience.
The House of Commons agreed unanimously in November 2008 to establish this Speaker's Conference. The Conference was asked to look into the reasons why women, members of the black and minority ethnic communities and disabled people are under-represented in the House of Commons, and to recommend ways in which the situation can be improved. Issues relating to the representation of gay, lesbian, bisexual and transgender communities were also considered. Currently most MPs are white, male, middle-aged and middle-class: the House of Commons should reflect more closely the diverse society in which we live. The Conference makes and draws 71 recommendations and conclusions. Individual chapters cover: the case for widening representation; citizenship and engagement; the importance of political parties; the role of the MP and how to become one; selection processes and barriers to selection; tackling supply-side barriers; changing the culture of Parliament. The Conference reports after a period of unprecedented diminishing of the House's reputation through the expenses scandal. This has combined with increasing dislocation between citizens and the democratic process. The need for change is recognised and this report outlines many practical steps that can be taken to correct under-representation. Broadening representation would also bring a positive benefit of improved effectiveness in the development of legislation and the scrutiny of Government performance.
The threat of a cyber attack to the UK is so serious it is marked as a higher threat than a nuclear attack. One can steal more on the internet than they can by robbing a bank and online criminals in 25 countries have chosen the UK as their number one target. Astonishingly, some are operating from EU countries. If we don't have a 21st century response to this 21st century crime, we will be letting those involved in these gangs off the hook. After a 10 month inquiry the Committee concluded that: a dedicated state of the art espionage response team should be established so that attacks can be immediately reported; Banks must be required to report all e-crime fraud to law enforcement; it is alarmed that CEOP is having its budget cut by 10% over 4 years, its experienced Chief Executive is leaving and it could lose its laser-like focus when merged with the National Crime Agency; it is still too easy for people to access inappropriate online content and those responsible need to take stronger action to remove such content - the Government should draw up a mandatory code of conduct with them to remove material which breaches acceptable standards; the DPP should review sentencing guidance and ensure e-criminals receive the same sentences as if they had stolen the same amount of money or data offline; the Government should look at setting up a similar organisation to the Internet Watch Foundation focused on reporting and removing online terrorist content
This will help us customize your experience to showcase the most relevant content to your age group
Please select from below
Login
Not registered?
Sign up
Already registered?
Success – Your message will goes here
We'd love to hear from you!
Thank you for visiting our website. Would you like to provide feedback on how we could improve your experience?
This site does not use any third party cookies with one exception — it uses cookies from Google to deliver its services and to analyze traffic.Learn More.