A bill to ensure senior managers in financial services are held to account for failings has been granted Royal Assent, marking the last major milestone in a series of reforms.
HM Treasury announced yesterday (4 May) the Bank of England and Financial Services Act 2016, which began its journey through Parliament in October, has been given the stamp of approval.
The act is the third major piece of legislation the government has taken through Parliament to reform the financial sector.
| It includes the following measures: |
| Strengthening the governance and accountability of the central Bank. |
| Boosting taxpayers’ protection from firm failure, by updating resolution planning and crisis management arrangements between the Bank and Treasury. |
| Ensuring senior managers across the financial services industry can be held to account for failings which occur on their watch. |
| Extending the scope of the Pension Wise service, so pensioners are able to sell their annuity income and access free impartial guidance from April 2017. |
| Giving the Treasury new powers to help tackle illegal money lending. |
| Promoting diversity and competition in the banking sector by ensuring regulators take into account different business models as part of their competition objectives. |
Mark Carney, governor of the Bank of England, said the legislation will ensure the Bank of England can operate more effectively.
The overhaul of financial services regulation started in 2012 when the government broke up the previous tripartite system - Financial Services Authority, the Treasury and the Bank of England - after the financial crisis revealed serious flaws in its ability to spot problems in the financial sector.
In 2013, the Banking Reform Act 2013 made sweeping changes to enhance individual accountability and raise standards in banking.
Harriett Baldwin, economic secretary to the Treasury, said the Bank of England Act 2016 builds on the changes the government has made since 2010, and “makes sure the Bank is on the best possible footing to oversee its expanded remit”.
katherine.denham@ft.com
