Insights from the UK and beyond
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.
from The Great Debate UK:
-- Neil Collins is a Reuters columnist. The opinions expressed are his own --
Sir Richard Greenbury has had a Damascene conversion. The former boss of Marks & Spencer tells The Times that he's now in favour of continental-style two-tier boards, contrary to his own report into corporate governance 14 years ago.
The old bruiser thinks this would have prevented the emergence of the likes of Sir Fred Goodwin, the reviled former boss of Royal Bank of Scotland whose non-executive directors were too weak to question his o'ervaulting ambition.
from The Great Debate:
-- Alexander Smith is a Reuters columnist. The opinions expressed are his own --
Some predict that the financial crisis spells the end for London as a major global financial centre, arguing it has thrived on lax regulation and a quasi-tax haven status and that the regulatory backlash which inevitably follows such a catastrophic economic debacle will suffocate the innovation and the financial incentives which have driven the growth of services in the British capital.
The Financial Services Authority (FSA) has published a blueprint for a shake-up of global banking regulations aimed at preventing a repeat of the current financial crisis. The report, authored by FSA Chairman Adair Turner, recommends an increase in banks’ minimum capital requirements, closer regulation of hedge funds as well as proposals to stop banks lending too much during boom years and measures to restrict the ability of banks to take excessive risks.
The report comes a week after FSA Chief Executive Hector Sants said in a speech at Thomson Reuters London offices that the banking sector should be “very frightened” of the regulator.