Financial Secretary to
the Treasury launches consultation on the implementation of
financial regulation reforms announced at Mansion House
Secretary to the Treasury, Mark Hoban MP, today launched the
Government’s consultation on the implementation of reforms to
financial regulation, http://www.hm-treasury.gov.uk/consult_financial_regulation.htm .
The document sets out detailed proposals for reform of the
financial services sector, first announced by the Chancellor in
his Mansion House speech on 16th June 2010.
The Chancellor set out plans to overhaul the system of Financial
Regulation giving the Bank of England powers over macro prudential
regulation through a newly established Financial Policy Committee
(FPC), which will be established on an interim basis from Autumn
The consultation invites views on this proposal in addition to
plans to create:
- A new prudential regulator under the control of the Bank of
England headed by a new Deputy Governor (the first of whom will be
current Financial Services Authority Chief Executive, Hector
Sants), which will be responsible for supervising the safety and
soundness of individual financial firms.
- A new Consumer Protection and Markets Authority (CPMA) to act
as a single integrated regulator focussed on conduct in financial
Financial Secretary to the Treasury, Mark Hoban
"The Coalition Government is delivering on its
commitment to reform the financial system, to avoid repeating the
mistakes of the recent financial crisis and to ensure that
taxpayers are protected. Today is a crucial milestone in our
programme of reform. To take this forward, we would welcome the
input of everyone who has an interest, including regulators and
the regulated community, to ensure that we get the design right."
Notes for Editors
1. The consultation seeks views on the detailed composition of
the new financial regulatory architecture, including the scope,
objectives, powers, and governance arrangements for the new
regulatory bodies (the financial policy committee, the prudential
regulation authority, and the consumer protection and markets
authority), and issues concerning the relationship between them.
2. The Government intends to introduce legislation to create the
new regulatory authorities in the current Parliamentary session,
and expects passage of primary legislation to be completed in the
next two years. The FSA will retain its current responsibilities
throughout the transition period, although a new interim Financial
Policy Committee will be established in the autumn on a
non-statutory basis. The FSA intends to move to separate conduct
and prudential regulation in shadow form in the first quarter of
3. The Coalition Government’s Programme for Government set out
the following action on financial regulatory reform:
"We will reform the regulatory system to avoid a
repeat of the financial crisis. We will bring forward proposals to
give the Bank of England control of macro-prudential regulation
and oversight of micro-prudential regulation."
4. In his Mansion House speech on 16 June 2010, the Chancellor of
the Exchequer, George Osborne, outlined the Government’s plans for
reforming the regulatory system, including the creation of an
independent Financial Policy Committee at the Bank of England, a
new prudential regulator, and a new consumer protection and
"At the heart of the crisis was a rapid and
unsustainable increase in debt that our macroeconomic and
regulatory system utterly failed to identify let alone prevent…
The FSA became a narrow regulator, almost entirely focussed on
rules based regulation… despite the changes that have been made, I
am still not confident that the fundamental problems of culture
and regulatory structure have been confronted."
5. The Financial Secretary to the Treasury, Mark Hoban MP,
made an oral statement to Parliament on 17 June 2010 outlining
further detail of the proposals. Both the Chancellor’s speech to
Mansion House and the Financial Secretary’s statement are
available on the Treasury website.
6. The consultation
will close on 18 October 2010.
Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to
This Press Release and other Treasury publications are available
on the HM Treasury website hm-treasury.gov.uk For the latest
information from HM Treasury you can subscribe to our RSS feeds or
Media enquiries should be addressed to the Treasury Press Office
on 020 7270 5238.
HM Treasury Press Office
Phone: 020 7270 5238