Alistair Darling has launched a consultation on strengthening the current framework for financial stability and protecting depositors.
The consultation document, published jointly by the Treasury, the FSA and the Bank of England, sets out proposed action to strengthen the stability of the financial system both in the UK and globally, reduce the likelihood of banks facing difficulties and reduce the impact if a bank does gets into difficulties.
It also proposes action to provide effective compensation arrangements in which consumers have confidence, strengthen the Bank of England and ensure effective coordinated actions by authorities both in the UK and internationally.
Darling says: “Recent months have seen a period of sustained turbulence and instability in global financial markets. 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 January 26 has informed the consultation document published today and I am grateful for its positive contribution.”
The consultation period ends on April 23, 2008.