Wednesday, 8 July 2009

Osborne announces fundamental reform of financial regulation

George Osborne has promised to overhaul the system of financial regulation and put the Bank of England in charge of regulating the banking system.

Following on from Sir James Sassoon’s review of financial regulation, George, the Shadow Chancellor, today set out plans to reform the way we regulate the banking system.

He announced that a Conservative Government would put the Bank of England in charge of the prudential supervision of our banks, building societies and other significant financial institutions.

George said, “We have learnt from this crisis the old truth: that you cannot separate central banking from the supervision of the financial system. And that sound regulation is not just about a check-list of rules; it’s about the authority to exercise judgement and to see the bigger picture.”

Sitting alongside this stronger Bank of England would be a powerful regulator to protect consumers.

Its role, George explained, would be “not just to add more health warnings alongside the acres of small print that already come with financial products, but to stamp out unfair practices like mis-sold Payment Protection Insurance and excessive bank charges.”

“The Labour Party wants to stick with the financial system which failed us and which they created," George stressed. "We propose to overhaul that system and put the Bank of England in charge."

"People will know at the next election that if they want to change the way the City is regulated and the way our banks are regulated, they need to change their Government.”

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