Financial regulation plan: white paper or white flag?
Chancellor Alistair Darling set out new plans to strengthen regulation of financial markets on Wednesday. The white paper proposes enforcing higher levels of capital for banks and increasing liquidity to prevent a re-run of the credit crunch.
Darling wants banking pay packages to be policed and for a new Council for Financial Stability to bring together the work of the Bank of England, Financial Services Authority and the Treasury.
Although the “tripartite” setup under which the finance ministry, Financial Services Authority and Bank of England supervise the financial markets was widely seen as failing to spot problems at Northern Rock and other banks early enough, Darling has decided not to scrap it.
Shadow Chancellor George Osborne called the Labour plans “more of a white flag than a white paper” in a rebuttal in parliament.
“The next Conservative government will abolish the tripartite system and will put the Bank of England in charge of the banks . . . and other financial institutions because you cannot separate central banking from the financial supervision system,” he said.
What do you think, are the new plans more of a white flag than a white paper? Are the Conservatives on the right track or should the tripartite system be retained?