The UK Treasury Friday unveiled legislation to overhaul financial regulation that would abolish the Financial Services Authority and fundamentally reshape the country’s regulatory landscape.
The British government published legislation that aims to transform and strengthen financial regulation in the United Kingdom. The bill would abolish the FSA and create the new Financial Conduct Authority to oversee consumer protection, while handing responsibility for prudential regulation and financial stability to the Bank of England.
Additionally, the government says that the bill empowers regulators to look beyond ‘tick-box’ compliance, and fosters a regulatory culture of judgment, expertise and proactive supervision. It also gives the responsibility for regulating consumer credit to the new FCA, and creates a new crisis management regime to provide greater clarity and accountability to protect taxpayers during times of crisis.
“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,” said Financial Secretary to the Treasury, Mark Hoban.
In response, the British Bankers’ Association said that banks fully support the regulatory overhaul. “Today’s publication of the Financial Services Bill is an important milestone in rebuilding trust in the financial services sector. There are still many issues to work though and we will continue working with government so the new structures, as they emerge, help supervisors improve their decision-making,” said BBA chief executive, Angela Knight.
Knight also said that the BBA believes the Bank of England’s new powers need to be balanced by stronger governance and accountability.
Second reading of the bill is provisionally scheduled to take place on Feb. 6, and the government will seek Royal Assent by the end of the year.