Financial Regulatory Forum

UK’s Darling says banks to face tougher regulation

July 6, 2009

Britain's Chancellor of the Exchequer Alistair Darling     LONDON, July 4 (Reuters) – British finance minister Alistair Darling said “kamikaze” bankers brought the financial system to the point of collapse and regulators would get new powers to probe banks’ affairs.
   Writing in Sunday’s News of the World, he said reforms to be unveiled by the government in the next week would subject banks to tough new rules that would prevent a repeat of the crisis.
   Darling has already said that both the Bank of England and Financial Services Authority will get new powers.
   “Regulators will get powers to do their jobs more effectively, to ask searching questions of institutions,” he wrote.
   “We need to learn lessons from the financial crisis in which banks behaved in a kamikaze manner and the regulatory system failed.”
   Darling said far too many people in boardrooms did not know or understand what was happening in their institutions, and regulators around the world failed to grasp the true risks to the system.
   The proposed reforms, he said, would deliver “tougher regulation and more rigorous monitoring and managing of system-wide risks”. This would allow authorities to intervene more quickly when problems arose.
   Analysts expect the government’s blueprint for reform to include heavier capital and liquidity requirements, putting pressure on banks’ profit margins, as well as tighter scrutiny over remuneration.
   However, it is not expected to make radical changes to the tripartite system where responsibility for financial oversight is shared between the Bank of England, Financial Services Authority and the Treasury.
   For a story on likely reforms, click on [ID:nLM236498] (Reporting by Christina Fincher, edited by Richard Meares)
 ((christina.fincher@reuters.com; London newsroom +44 20 7542 7748))
 Keywords: BRITAIN DARLING/BANKS
  
Saturday, 04 July 2009 22:07:50RTRS [nL4563815 ] {C}ENDS

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