George Osborne revealed that most of the Independent Commission on Banking’s (ICB) proposals will not be “shoehorned” into the draft Financial Services Bill.
Most of the Independent Commission on Banking’s (ICB) proposals will not be “shoehorned” into the draft Financial Services Bill, but will be implemented through new legislation according to the Chancellor, George Osborne.
Alongside recommendations to ringfence banks and make them hold more capital; the ICB’s report also calls for the Financial Conduct Authority (FCA) to be given a statuary objective to “promote effective competition”.
The Chancellor’s announcement follows calls made earlier this week from a member of the Financial Policy Committee for the ICB’s recommendations to be implemented within two years. The Business Secretary, Vince Cable had originally proposed that the measures be included in the draft Financial Services Bill which is due to be implemented in 2012.
However, Cable and Osborne have now reached an agreement to legislate for the move separately with legislation due to be in place by 2015 with full implementation of the new regime up and running by 2019. Osborne has given the 2019 date his complete backing for the ICB’s proposals as it aligns with Basel III.
Giving evidence this week to the committee that are scrutinising the draft Financial Services Bill, Osborne said: “There may be some features of the ICB’s recommendations we are able to put into its bill, particularly around ensuring the FCA has a proper regard to competition. But we take the view that shoehorning into this important piece of legislation hastily drafted clauses implementing the ringfencing would have been a mistake and risked creating poor legislation.”
Osborne told the committee: “We are confident we can implement the ringfence in a way that improves financial stability and helps regulators rather than distracts them.”