On January 30, HM Treasury, the UK Financial Services Authority and the Bank of England published a consultation on proposals for strengthening the current framework for banking regulation. The consultation, Financial stability and depositor protection: strengthening the framework, sets out proposed action, both in the UK and internationally, to achieve five key objectives: (i) strengthening the stability of the financial system; (ii) reducing the likelihood of banks facing difficulties; (iii) reducing the impact where a bank gets into difficulties; (iv) providing effective compensation arrangements in which consumers have confidence; and (v) strengthening the Bank of England and ensuring effective coordinated actions by appropriate authorities.

The deadline for comments is April 23. The UK Government intends to introduce legislation to give effect to the new regulatory scheme later in 2008.