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; and steps to strengthen the handling of cases of widespread consumer detriment, including mis-selling.
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.
The British Bankers' Association said: "The programme of regulatory reform in the UK is now well underway. Today's white paper is an enormously significant milestone. Regulatory change carries with it real consequences for consumers and businesses. This is not an abstract set of rules for an industry. It is fundamental to financial stability and economic recovery: it ensures standards of discipline in the financial markets and safeguards the international reputation of the City as the world's financial centre - and one of the biggest contributors to the UK economy.
"It is therefore essential to everyone in the UK that this process results in the creation of the right regulatory institutions with the right powers - and crucially with the right communications in place to ensure that future problems are identified, anticipated and acted upon quickly.
"The UK's banks will now consider this significant document closely and will respond in detail."
