Government Announces Overhaul of British Banking Regulations.
Britain's Treasury chief on Wednesday announced a plans to overhaul Britain's banking regulations to prevent future runs on banks similar to what mortgage lender Northern Rock experienced last year.
The government also said Bank of England Governor Mervyn King had been reappointed for a second five-year term as Bank of England governor. King is chairman of the Bank's Monetary Policy Committee.
Treasury Chief Alastair Darling said the regulatory changes were aimed at better protecting depositors and ensuring financial stability. The Treasury has been under pressure to come up with new proposals following a run on the Northern Rock bank in September -- Britain's biggest casualty of the global credit crisis.
"Recent months have seen a period of sustained turbulence and instability in global financial markets, with financial firms across the world affected," Darling said in a statement. "A response to these episodes requires action, not only from the U.K. authorities, but also from international firms and institutions."
He proposed five objectives to ensure a more stable financial environment. They included: strengthening the stability of the financial system, both in Britain and globally; reducing the likelihood of banks facing difficulties; reducing the impact if a bank gets into trouble; improving deposit guarantees to boost consumer confidence, and strengthening the Bank of England.
He said the government will spend three months consulting with consumers, British financial institutions, and their counterparts around the world before the government prepares to introduce new legislation in Parliament.
Northern Rock ran into trouble in September because it relied too heavily on short-term money markets instead of deposits for funding. A subsequent profit warning and appeal to the Bank of England for an emergency loan led to the first run on a British bank since 1866.
Britain's Treasury chief on Wednesday announced a plans to overhaul Britain's banking regulations to prevent future runs on banks similar to what mortgage lender Northern Rock experienced last year.
The government also said Bank of England Governor Mervyn King had been reappointed for a second five-year term as Bank of England governor. King is chairman of the Bank's Monetary Policy Committee.
Treasury Chief Alastair Darling said the regulatory changes were aimed at better protecting depositors and ensuring financial stability. The Treasury has been under pressure to come up with new proposals following a run on the Northern Rock bank in September -- Britain's biggest casualty of the global credit crisis.
"Recent months have seen a period of sustained turbulence and instability in global financial markets, with financial firms across the world affected," Darling said in a statement. "A response to these episodes requires action, not only from the U.K. authorities, but also from international firms and institutions."
He proposed five objectives to ensure a more stable financial environment. They included: strengthening the stability of the financial system, both in Britain and globally; reducing the likelihood of banks facing difficulties; reducing the impact if a bank gets into trouble; improving deposit guarantees to boost consumer confidence, and strengthening the Bank of England.
He said the government will spend three months consulting with consumers, British financial institutions, and their counterparts around the world before the government prepares to introduce new legislation in Parliament.
Northern Rock ran into trouble in September because it relied too heavily on short-term money markets instead of deposits for funding. A subsequent profit warning and appeal to the Bank of England for an emergency loan led to the first run on a British bank since 1866.
No comments:
Post a Comment