Business Secretary Vince Cable says it is too early to say how much of the legislation that brings in the Independent Commission on Banking’s recommendations will be included in the Financial Services Bill.
Earlier this month, Chancellor George Osborne told Parliament that the bill “might well” be a vehicle for the reforms but that some changes may need a new bill. He said this is partly because of the need to get the Financial Services Bill through the house quickly so the new regulators are up and running by 2013.
Shadow Chancellor Ed Balls challenged him, saying the Financial Services Bill should include “as much of the changes as possible”.
In a speech at the Liberal Democrat conference in Birmingham last week, Cable reiterated that legislation will be in place by 2015.
Speaking to Money Marketing after his speech, Cable said the Government is united in getting the legislative groundwork done in this Parliament.
He said: “It is absolutely clear, the Chancellor and I have said the necessary legislation will be done in this Parliament. It would be sensible to use the Financial Services Bill for some of what is required but it is too early to talk about the precise mechanics.”
LibDem Treasury spokesman in the Lords and member of the Parliamentary committee scrutinising the draft Financial Services Bill Dick Newby says the ICB’s proposals for structural reforms of banks should be in the bill.
But he adds that rules to push ringfenced retail banks to hold more capital and dramatically increase loss-absorbing capacity should be implemented separately.
He says: “On capital adequacy rules, the situation is more complicated because there is parallel EU legislation that it needs to be in synch with.”
Treasury select committee member Lord Thurso says: “I am convinced that most bankers would like to see these proposals disappear and so it is vital this does not become a good idea that bleeds away into the sand with the passage of time.”