US Binary Option SitesUK Binary Option Sites

UK Treasury Committee Urges New Banking Regulatory Body

Andrew TyrieUK’s House of Commons Treasury Committee is asking UK Chancellor Philip Hammond to consider setting up a separate new body that will oversee banking operations in the country. Citing the findings from the investigation into the Halifax Bank of Scotland (HBOS) disaster, chairman of the committee, the Right Hon. Andrew Tyrie MP said that it was advisable to move out the enforcement arm of the regulatory body, the Financial Conduct Authority (FCA).

According to Tyrie having a separate body would foster the idea that the enforcement function was independent and would help in avoiding further banking failures.

In a statement, Tyrie said

The regulators failed, both before and after the HBOS crisis. Seven years after the bank’s collapse, we now know just how badly. It took persistent pressure from the Treasury Committee to ensure these failures weren’t swept under the carpet. So the HBOS experience calls for the FCA and the PRA to exhibit greater vigilance and energy if they are to win public confidence. This has on occasion been lacking

Financial Times

Tyrie made his observation based on findings from the lengthy investigation and review into the bank’s failure. The HBOS Bank collapsed in 2008 which led to hundreds of jobs being lost and subsequently had to be merged with the newly-created Lloyds Banking Group as part of a taxpayer funded bailout of around £20.5 billion.

The bank had been formed in 2001 as a result of a merger between Halifax and the Bank of Scotland. HBOS had expanded and given out loans with little caution which resulted in its collapse when the 2008 financial crash occurred. The then-regulatory body, the Financial Services Authority was criticized severely for not monitoring the sector effectively and was later scrapped. Two new agencies called the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) which are a part of the Bank of England were set up for the oversight of the banking sector.

According to the committee, under the current arrangement the bank regulator could be overburdened as it is responsible for both supervising banking operations and handling disciplinary issues. A Treasury spokesperson said that the sector has been reformed considerably over the past few years and the identified failures have been addressed.

The spokesperson added that while the department would examine the findings and recommendations of the Committee, it had found in 2014 that separating enforcement was not a suitable option. According to the FCA, splitting out enforcement would lessen its efficacy as a regulator.

Related Articles

Rising UK House Prices Forcing Young Adults To Live With Parents

The latest research reveals that the number of young adults living at home in the United Kingdom is likely to

FCA To Probe UK Banks Links To South African Money Laundering

Chancellor Philip Hammond said that he had written to the Financial Conduct Authority (FCA), the financial regulator in the United

United Arab Emirates To Start 2018 By Introducing VAT

Starting January 1, 2018 the UAE government will be imposing a 5 percent Value Added Tax (VAT) on a number