Members of the Lords, including a former Chancellor of the Exchequer, former Chief Secretary to the Treasury and members of the Joint Parliamentary Committee on Banking Standards, debated the main purpose and key principles of the Financial Services (Banking Reform) Bill yesterday (Wednesday 24 July).
The Commercial Secretary to the Treasury, Lord Deighton (Conservative), opened the debate and identified the three pillars of this legislation, which forms a key part of the government's response to the global financial crisis of 2007-09. Firstly, reform of financial regulation, second, structural reform of the banking industry and lastly, reform of banking standards and culture.
Members went on to discuss the power established in the bill for the creation of a ring-fence in the banking sector. There was a call for more information on where exactly the ring-fence might lie - and how electrified or permeable it might be.
Other issues raised included the question of competition within the banking system, the potential deferment of bonus payments to bankers and the argument for regional banks and more support for credit unions to tackle the problem of payday lending.
The Financial Services (Banking Reform) Bill now moves to committee stage, the chance for line by line scrutiny. A date is yet to be scheduled.
Financial Services (Banking Reform) Bill summary
The bill seeks to reform legislation about banking and other financial services including:
- the Financial Services Compensation Scheme
- the amounts owed in respect of certain deposits to be treated as a preferential debt on insolvency
- the accounts of the Bank of England and its wholly owned subsidiaries.
Further information
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