Darling outlines banking regulation reform

Darling outlines banking regulation reform

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Wednesday, 08, Jul 2009 05:45

The government has unveiled plans to reform the financial sector in a bid to prevent any repeat of the current economic crisis in the future.

In outlining the white paper to MPs in the Commons chancellor Alistair Darling said consumers needed to receive more protection.

He proposed a financial stability council bringing together the Bank of England, the Financial Services Authority (FSA) and the Treasury.

Mr Darling said the council would address and deal with both immediate and long-term risks to the stability of the financial sector.

The chancellor added the council's responsibilities would be set out in law and regular minutes published.

The white paper would also build on previous reforms, Mr Darling said, and would help the FSA develop higher standards and transparency.

Responding to criticism that the government and the regulatory bodies should have spotted the severity of the financial crisis earlier, the chancellor said no simple fix could have prevented the credit crunch and there was no model around the world that had prevented the recession.

Earlier prime minister Gordon Brown said changes had to be made to help encourage economic recovery.

"If nothing changes as a response to the financial crisis, then the world will be more unstable and growth will be unsustainable so things have got to change," he said in an interview with the Reuters news agency.

Mr Darling said today the government still planned on returning its stakes in some of the country's biggest banks and pledged to "empower" consumers in the future.