UK banking sector reforms come into force
The UK Government completes the 'biggest reforms in a generation' to the banking sector.
The UK Government has completed what has been as the biggest ever reform of the banking sector, after Parliament passed the Banking Reform Pensions Regulations 2015 under the Banking Reform Act 2013 today (5 March 2015).
The regulations are the final piece of secondary legislation under the Act and are designed to ensure that ring-fenced banks cannot be liable for the pension liabilities of other parts of the wider banking group.
The reforms are based on almost five years of consultation on the future of the UK's financial sector and the government has said that they represent the most extensive overhaul of Britain's banking system.
The Banking Reform Act implements the recommendations of the Independent Commission on Banking (ICB), set up by the government in 2010 under the chairmanship of Sir John Vickers to consider structural reform of the banking sector.
Chancellor George Osborne said that the Act put in place the final piece of legislation to "enact the biggest reforms to Britain's banks in a generation".
He added: "From putting the Bank of England back at the heart of safeguarding financial stability to implementing the recommendations of our Vickers Commission so no bank is too big to fail, we've taken the action needed to build a banking system that delivers for Britain in the future."
"It's part of a formidable agenda for economic policy over the years ahead, a long term economic plan for Britain that delivers for hardworking people."
Sir John Vickers said: "The [global economic] crisis showed the dangers to the economy and public finances of an unstructured banking system with too little capital. Banking reform – notably ring-fencing and greater loss-absorbency – has now set the framework for banks to serve the economy properly in the future."
Source: HM Treasury www.gov.uk