On Thursday, the U.K.'s new coalition government published a report entitled The Coalition: our programme for government, describing a new bipartisan programme resulting from discussions between the Conservative Party and the Liberal Democrats. The report discusses several of the U.K. government's plans with respect to, among other areas, political reform, public health, schools and education, tackling the deficit and reform of the banking system. Notably, according to the report, the current system of financial regulation is "fundamentally flawed and needs to be replaced with a framework that promotes responsible and sustainable banking, where regulators have greater powers to curb unsustainable lending practices." A brief summary of actions the government intends to take with respect to banking regulation and enforcement include:
- Reforming the banking system to avoid a repeat of the financial crisis, to promote a competitive economy, and to sustain the economic recovery;
- Introduce a banking levy and detailed proposals to tackle "unacceptable bonuses" in the financial services sector;
- Introduce proposals to "foster diversity in financial services" and create a "more competitive banking industry";
- Take steps to reduce systemic risk in the banking system and establish an independent commission to investigate the separation of retail and investment banking;
- Develop proposals to provide the Bank of England with control over macro-prudential regulation and oversight of micro-prudential regulation; and
- Create a single agency to "tackle" serious economic crime, combining relevant elements of the Financial Services Authority, the Serious Fraud Office and the Office of Fair Trading.