New BoE And Financial Services Bill Published

The government has published a new Bank of England and Financial Services Bill, aimed at strengthen the governance and accountability of the Bank, update resolution planning and crisis management arrangements between the Bank and Treasury, and extend the principle of personal responsibility to all sectors of the financial services industry.

The bill has been introduced into the House of Lords and will ensure the Bank of England is well equipped to fulfil its vital role of overseeing monetary policy and financial stability, a key part in the government's long term plan to build a resilient economy.

Chancellor of the Exchequer, George Osborne said: "Ensuring the Bank of England is well positioned to fulfil its vital role of overseeing monetary policy and financial stability is a key part of the government’s long term plan to build a resilient economy, delivering the economic security of a country that lives within its means.

"Building on the substantial reforms we've made to our financial and regulatory architecture since 2010, the measures in the Bank of England and Financial Services Bill make sure the Bank is on the best possible footing to oversee its expanded remit, and takes further steps to protect taxpayers from firm failure.

"These important new reforms will also mean that the Bank of England continues to be an international example of best practice, with strengthened and transparent governance and accountability arrangements that are central in supporting the Bank's critical role in supporting economic stability across our country."

The Bank of England and Financial Services Bill will:

• improve the accountability and governance of the Bank of England by making its Court of Directors a smaller, more focused unitary board

• implement the recommendations of the Warsh Review by moving the Monetary Policy Committee to a schedule of a minimum of eight meetings a year

• complete the Governor's 'one bank' reforms by bringing the Prudential Regulation Authority within the Bank, ending its status as a subsidiary, and establishing a new Prudential Regulation Committee

• make changes to the Financial Policy Committee including making it a statutory committee of the Bank, in line with the and the new

• place the new Deputy Governor for Banking and Markets in legislation, adding the position to the Court of Directors and the

• bring the Bank within the purview of National Audit Office value for money studies, improving transparency and accountability for its use of resources

• further strengthen coordination arrangements between the Treasury and the Bank in protecting taxpayers and the wider economy from bank failures

• extend the Senior Managers and Certification Regime to all financial services firms, and implement a fairer system by introducing a 'duty of responsibility', superseding the 'reverse burden of proof'

• extend the scope of the Pension Wise guidance service to enable the provision guidance services to pensioners considering selling their annuities when new flexibilities are introduced in 2017

• makes technical changes to the Scottish and Northern Irish Banknote issuance regime to facilitate group restructuring (such as restructuring undertaken to implement ring-fencing)

(MH/LM)