News and Press
New Government's proposals to impact Financial Services sector

The Conservative-Liberal coalition policy document published on 20 May 2010 states that the current system of financial regulation is “fundamentally flawed and needs to be replaced with a framework that promotes responsible and sustainable banking”.

The new government's proposed policies, which are likely to have a significant impact on the Financial Services sector, include:
• The introduction of a banking levy.
• Proposals for tackling 'unacceptable' bonuses.
• Promotion of mutuals and a more diverse and competitive banking industry.
• Loan guarantee schemes and net lending targets for nationalised banks.
• An independent commission to investigate the separation of retail and investment banking to report within one year.
• The Bank of England to control macro-prudential regulation and to have oversight of micro-prudential regulation.
• The creation of a free national financial advice service.
• The abolition of HIPS with immediate effect.
• The courts to have power to ensure that repossession is always a last resort.
• Measures to end 'unfair' bank charges.

TLT's Head of Financial Services, Richard Waller, says "The markets have so far responded negatively to the proposals which seek to constrain the activities of the banks. The future role of the FSA remains unclear. The Queen's Speech on 25 May is an opportunity for the government to provide greater clarity as to its intentions".

Over the next few months TLT will be monitoring the development of these proposals and assessing their impact. To keep up-to-date with TLT's analysis, please click here to sign up to our e-newsletters.