U.K. financial institutions will be relieved to learn that, according to the
Daily Telegraph newspaper, the government does not plan to rush new
legislation on reforming the industry. The Telegraph said on Tuesday that a Treasury white paper, due to be published on Wednesday, does not offer any firm proposals, indicating that new laws will be delayed, perhaps until after the next election.
The paper, a precursor to legislation, discusses so-called "macro-prudential tools" to curb excessive lending by banks but shies away from policy decisions. This is line with recent
comments by Bank of England's financial stability director Andy Haldane, who said there were "unanswered questions" about how macro-prudential regulation would work.
According to the British Broadcasting Corp., the white paper does, however, give ultimate authority to the Bank of England, with the establishment of a new committee of which a majority of members will come from the bank and a minority from the Financial Services Authority. This is a victory for Bank of England Governor Mervyn King, who has publicly asked for more power, although FSA Chairman Adair Turner, another regulator vying for influence,
recently told lawmakers he was happy for the bank to take control of the committee. -
Neil Sen
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