LONDON – The House of Commons Treasury Committee has published a report on banking reform that follows on from earlier consultation papers published by the UK tripartite authorities (HM Treasury, the Bank of England and the UK Financial Services Authority) in the wake of the Northern Rock crisis. The most recent report makes further legislative recommendations and addresses the practicalities of implementing such changes by the end of February 2009.
Recommendations include strengthening the role of the Tripartite Committee to fill a central role for communications between Treasury, the Bank of England and the FSA in crises and in regular stress scenario testing.
Heightened supervision and the Special Resolution Regime (SRR) is another focus. The report says the FSA must be placed under statutory duty to prepare and consult on a code of practice for heightened supervision. The Bank of England will also be given the power to recommend institutions to be placed under the SRR, and any decisions taken must be explained via the Tripartite Committee.
The report also recommends strengthening existing deposit protection measures and the statutory establishment of the Financial Stability Committee along the lines of the Monetary Policy Committee.
The report can be read in full by clicking the following link.