A consultation on proposals for strengthening the current framework for financial stability and protecting depositors has today been launched by the Chancellor of the Exchequer. The consultation document is published jointly by HM Treasury, the Financial Services Authority and the Bank of England (the Authorities).
Following the recent period of turbulence and instability in global financial markets, the consultation document sets out the Authorities' proposed action, both in the UK and internationally, to achieve five key objectives:- strengthening the stability of the financial system, both in the UK and globally;
- reducing the likelihood of banks facing difficulties;
- reducing the impact if, nevertheless, a bank gets into difficulties;
Launching the consultation document, the Chancellor of the Exchequer, Alistair Darling, said: "Recent months have seen a period of sustained turbulence and instability in global financial markets, with financial firms across the world affected. A response to these episodes requires action, not only from the UK Authorities, but also from international firms and institutions.
The Government is determined that its response is proportionate and appropriate and will therefore consult actively on these proposals, seeking discussions with financial institutions, consumer representatives and counterparts from across the world, to ensure that the final arrangements are effective and deliver the five objectives set out here.
The Treasury Select Committee's report published on 26 January has informed the consultation document published today and I am grateful for its positive contribution."
Background- Financial stability and depositor protection: strengthening the framework is published jointly by HM Treasury, the Financial Services Authority and the Bank of England (the Authorities). This consultation document (CM7308) is available on the HM Treasury website at http://www.hm-treasury.gov.uk/consultations_and_legislation/consult_liv eindex.cfm
- The deadline for comments on the consultation document is 23 April 2008, during which time the Authorities will be actively seeking views and engagement with stakeholders.
- The Government intends to follow up this consultation by introducing legislation into the Parliament later in this session.
