The House of Commons Library has provided an update on the amendments to the Financial Services (Banking Reform) Bill (the Banking Reform Bill) as it enters the Lords Report stage. The Bill is three times as long as it was when first introduced into the Commons. The paper explains the amendments that were introduced in each of the three days in the Lords' Committee stage that are expected to form a large part of the debate in the next stage of the Parliamentary process. The key changes included (and will now also include):

  • amendments to the proposals for electrification of the ring fence;
  • greater regulatory powers over senior managers in banks and criminal sanctions for reckless misconduct by senior managers in the management of a bank;
  • creation of a new payments regulator; 
  • a bail-in tool;
  • new regulatory powers relating to competition;
  • a limited rule-making power for the Prudential Regulation Authority (PRA) over financial holding companies; and
  • a requirement for PRA to look at the activities ring-fenced banks carry out that are exempted from the various activities otherwise prohibited under the Banking Reform Bill.

(Source: Banking Reform Bill Briefing Paper: Lords Committee Stages)