Banks will have to provide more information to regulators and hand over control if they get into difficulty under new Government plans to be announced today. Depositors will also have to be paid out within a week under a savers' compensation scheme, Chancellor Alistair Darling will tell MPs.
He is expected to leave the savings guarantee unchanged at £35,000, but is likely to encounter industry opposition over plans to make the banks fund the scheme upfront.
Mr Darling will say that there should be a greater requirement on banks to provide information to the Financial Services Authority to enable regulators to spot a crisis earlier. A "special resolution regime" will allow the FSA to take control of a bank should it get into trouble.
The proposals will be put out to consultation but Mr Darling hopes legislation can be drawn up by the end of the summer.
Meanwhile, the Conservatives will today unveil their own proposals for reforming financial regulation.
The Tory package would give significant new powers to the Bank of England in the event of another banking failure, including the ability to take a commercial bank into a special form of administration under a proposed system of "Prompt Corrective Action" that would ensure deposits are ring-fenced.
The banking industry would also be asked to fund a new system of deposit insurance for retail deposits up to £50,000.
By Andrew Porter and James Kirkup
© The Daily Telegraph
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article