Business and Other Briefings
FSA: The Financial Services Authority (FSA) has published the Turner Review of global banking regulation. Lord Turner, chairman of the FSA, was asked by the Chancellor of the Exchequer to review the events that led to the financial crisis and to recommend reforms.
The Review identifies three underlying causes of the crisis – macro-economic imbalances, financial innovation of little social value and important deficiencies in key bank capital & liquidity regulations. These were underpinned by an exaggerated faith in rational and self-correcting markets. It stresses the importance of regulation & supervision being based on a system-wide ‘macro-prudential’ approach rather than focussing solely on specific firms.
The Turner Review distinguishes between those areas where the FSA has already taken action, those where the FSA can proceed nationally, and those where international agreement needs to be achieved. It also recognises that there may be alternative specific ways to achieve the essential objectives of effective regulation.
Published alongside the Review is an FSA discussion paper (DP) (closes for comments on 18 June 2009) which sets out more detail on specific policy proposals. As the current crisis arose in the banking, investment banking and ‘shadow banking’ sectors, most of these proposals focus on these sectors. Possible implications for some other sectors are however identified.
CompC: The Competition Commission (CC) has published its final decisions in the BAA market inquiry – it will require BAA to sell both Gatwick and Stansted as well as either Edinburgh or Glasgow, within two years. They are to be sold in sequence, beginning with Gatwick, then Stansted, followed by either Edinburgh or Glasgow.
The CC is also requiring BAA at Aberdeen to improve consultation with airlines as well as publish certain financial and other information. In addition, the CC is recommending to the airports' regulator, the Civil Aviation Authority (CAA), that it should take certain specified action at Heathrow, the UK's only hub airport, where BAA will continue to have substantial market power even after the sale of Gatwick and Stansted.
Press release ~ CC: BAA airports – final report ~ BAA Airports inquiry ~ Civil Aviation Authority (CAA)
Guidance on the VAT treatment of unlimited access to all-inclusive leisure facilities.
An explanation of the effect of Finance Act 2008 changes to Capital Gains Tax - for partnerships with assets held since 31 March 1982.
The Information Sheet describes the background to the withdrawal of the Staff Hire Concession on 1 April 2009 and sets out the VAT treatment that should be applied from that date.