Government publishes Financial Services Bill

The government has published legislation which will fundamentally transform and strengthen financial regulation in the UK, financial secretary to the Treasury, Mark Hoban, has announced.

The Bill gives the Bank of England responsibility for protecting and enhancing financial stability, bringing together macro and micro prudential regulation;

The Financial Services Authority is to be abolished and replaced with the Financial Policy Committee, the Prudential Regulation Authority and the Financial Conduct Authority. These authorities will be expected to look beyond 'tick-box' compliance and foster a regulatory culture of judgment, expertise and proactive supervision.

The fundamental elements of the new framework are in line with the model put forward by the Chancellor in 2010, but contain a number of refined policy proposals.

These include measures to legislate for a new crisis management regime giving the Chancellor new powers over the Bank of England where public money is at risk. The intention being to provide greater clarity and accountability to protect the taxpayer during times of crisis.

In addition, the regulation of consumer credit will be in the hands of the Financial Conduct Authority, with the aim of better protection for consumers.

Mark Hoban said: "This government has taken the necessary action to tackle the difficult and dangerous legacy left behind by the financial crisis, including a tripartite structure not fit for purpose.

“We've listened to the views of stakeholders following an unprecedented period of consultation, and are determined to strengthen the financial system in a way that safeguards financial stability and protects consumers."