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Alistair Darling announced the creation of a council to deal with risks in the market. (Ben Stansall/AFP/Getty Images) |
Britain plans wider supervision of banks
Britain’s chancellor of the exchequer, Alistair Darling, presented long-awaited plans for new financial regulations to Parliament yesterday, but sidestepped a turf battle between the Bank of England and the Financial Services Authority and put off any limits on executive pay.
The central bank governor, Mervyn King, had been hoping for more regulatory powers over banks, complaining as recently as last month that his institution could warn of risks in the financial system but had no powers to act if such warnings went unheeded.
Instead, Darling announced the creation of a new council that would include the Treasury, the Bank of England, and the financial regulator, the FSA, to deal with risks in the market and at specific institutions.
“It is not about which institution does what but to ensure that the system is efficient,’’ Darling said in presenting the plans.
Britain is facing general elections within the next 12 months, which might render yesterday’s draft legislation irrelevant should the Labor Party of Prime Minister Gordon Brown be defeated.
The opposition Conservative Party, which leads in the polls, has called for an end to the tripartite system of financial supervision that was set up in 1997 by Brown when he was chancellor. The goal then was to split the responsibility for maintaining a healthy financial system among the Treasury, the Bank of England, and the FSA.
© Copyright 2009 Globe Newspaper Company.
