The Government has today published its financial regulation White Paper and draft Bill. These provide further detail on the Government’s proposed reforms to the financial regulatory regime within the UK.
Today’s White Paper has been extensively informed by the responses to the Government’s last round of consultation in February, and contains a number of new policy proposals which have been developed in light of stakeholder feedback, including:
• a specific statutory objective governing the Prudential Regulation Authority’s responsibilities for the insurance sector;
• an updated and enhanced competition regime under the Financial Conduct Authority (FCA); and
• steps to strengthen the handling of cases of widespread consumer detriment, including misselling.
The publication of this White Paper marks an important stage in implementing these proposals as it sets out detailed policy plans alongside draft legislation to form a clear blueprint for reform. It also marks the beginning of the Parliamentary stages of the process: pre-legislative scrutiny of the draft Bill is due to begin shortly and, subject to the progress of pre-legislative scrutiny, the Government hopes to introduce the Bill later this year.
Launching the proposals, Financial Secretary to the Treasury Mark Hoban MP said:
"This is a key milestone in the process of developing and implementing a new system of financial regulation, which will address the flaws in the ‘tripartite’ model that contributed to the financial crisis. This is a detailed blueprint for regulatory reform setting out how the new structure will work. This Government is determined to strengthen the financial system and to do so in a way that gets it right - that’s why we’ve worked hard to consult with a wide-range of stakeholders over the last year. We look forward to working with stakeholders and Parliament during the period of pre-legislative scrutiny.”
Significant progress has been made since the Chancellor used last year’s Mansion House speech to outline the Government’s plans to fundamentally reform the UK’s failed system of financial regulation. The Government set out initial thinking last July, and a further consultation paper - with detailed proposals for establishing a new system of specialised and focused financial services regulators - followed in February 2011.
Notes for Editors
1. In his Mansion House speech on 16 June 2010, the Chancellor of the Exchequer, George Osborne MP, outlined the Government’s plans for reforming the regulatory system, including the creation of an independent Financial Policy Committee at the Bank of England, a new prudential regulator as a subsidiary of the Bank, and a new independent conduct regulator.
2. Today’s Government White Paper and draft Bill follows two detailed consultations. In July 2010, the Government published ‘A new approach to financial regulation: judgement, focus and stability’. Further information can be found at: http://www.hm-treasury.gov.uk/consult_financial_regulation.htm.
3. In February 2011, the Government then published ‘A new approach to financial regulation: building a strong system’. Further information can be found at: http://www.hm-treasury.gov.uk/consult_finreg_strong.htm.
4. There has been strong engagement with these consultations, with over 350 written responses received. A summary of responses to the February consultation is contained within today’s White Paper:
5. Pre-legislative scrutiny of the draft Bill is scheduled to begin shortly. This offers a further opportunity for stakeholders and Parliamentarians to engage with and improve the Bill before its formal introduction to Parliament later this year.
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