HM TREASURY News
Release (117/08) issued by COI News Distribution Service. 6 November 2008
Ian Pearson MP,
the Economic Secretary to the Treasury, today launched a
consultation on safeguards for exercise of the powers under the
proposed Special Resolution Regime (SRR) that would be used to
deal with banks in severe financial difficulty. The safeguards -
which are set out in draft secondary legislation - aim to increase
the effectiveness of, and market confidence in, the 'partial
transfer powers' under the Banking Bill.
The Economic Secretary said:
"The Banking Bill,
introduced into Parliament last month, provides the tripartite
Authorities with wide-ranging tools to deal effectively with any
failing banks in the future. The Governement has always been
conscious that certain safeguards must be provided to ensure
market confidence in the use of these powers. Having consulted
widely, I am today proposing a set of effective safeguards to be
included in secondary legislation, and also consulting on a draft
code of practice to provide further information on how the
Authorities will use the Special Resolution Regime powers under
the Banking Bill.
"This development of this document has been informed by the
new Expert Liaison Group for banking that I established last
month. I would like to thank them for their positive and helpful
contribution to date and look forward to our continued engagement
with them on these important issues".
Notes for Editors
1. The proposals for safeguards and for a
code of practice, build on proposals on these two areas published
in the consultation document Financial Stability and depositor
protection: special resolution regime, this July.
2. The Government's new Banking Bill was introduced into
Parliament and received its first reading on 7 October 2008.
Second reading was on 14 October 2008.
3. The Government has, together with the Bank of England and the
Financial Services Authority, conducted three rounds of discussion
and consultation on the proposals that are contained in the new
Banking Bill. Over 200 responses have been received from banks,
building societies, insurers and their representative
organizations, as well as bodies representing citizens, consumers,
workers, businesses, legal and insurance professionals. Responses
were also received from international governmental and financial
organisations and from academics and individuals.
4. The expert liaison group, which was announced by the Economic
Secretary on 9 October 2008, has been established with a remit to
advise the Government on legislation relating to the Special
Resolution Regime. Its first role is to advise on the development
of these safeguards, and a code of practice. The group includes
members of leading financial services trade associations,
including the British Bankers' Association, the Building
Societies' Association, the London Investment Banking
Association, the Association of British Insurers, the Investment
Management Association and R3, the association of business
recovery professionals. The group also includes legal, financial
and other technical experts drawn from practitioner firms across
the different sectors of the City.
5. The consultation document 'Special resolution regime:
safeguards for partial property transfers' is available on
the Treasury website
http://www.hm-treasury.gov.uk/financial_stability_depositor_protection.htm
The consultation closes on 9th January.
Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk
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