WIREDGOV

The Chancellor of the Exchequer Alistair Darling has today published 'Reforming Financial Markets', a document setting out the Government’s proposals for the reform of the financial system.

The proposals focus on significant reform of the way banks are regulated, with more emphasis put on the risks financial firms can present to the economy and greater protections for consumers.  They include:

• New powers for the FSA to place higher capital requirements on firms that present greater risks to the system and measures to deal with the potential failure of institutions that could have a significant impact on the economy
• Steps to help consumers make better informed choices, including a national money guidance service funded by a levy on the financial sector and a new independent consumer education body.;
• A strengthened framework for financial stability, to deal with system-wide risks in today’s more complex and global markets. This will include legislating to set up a new Council for Financial Stability - which will bring together the Bank of England, the FSA and the Treasury to  monitor system-wide financial stability and respond to long-term risks as they emerge.

Alistair Darling said:

"Our economy has a clear need for well managed, well functioning banks and financial institutions - to perform a vital set of functions - channelling investment and helping people save and plan for the future. But regulators and governments too must learn from the events of the last two years - better understanding the risks that come from rapid globalisation in the financial system

“Our central objective must be to ensure that - as we come through the downturn - we reform and strengthen our financial system and rebuild it for the future. With consumers that are better informed, financial institutions that are better managed, and markets that are better regulated.”

Notes for Editors

1. View the full report 'Reforming financial markets' .

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