The Conservative and Liberal Democrat coaltion negotiations reached agreement on banking reform on 11 May. The parties have agreed:
- reform of the banking system is essential;
- to introduce a banking levy;
- to tackle unacceptable bonuses in the financial services sector;
- to create a more competitive banking industry, including promoting mutuals;
- to set up an independent commission to look at separating retail and investment banking to reduce systemic risk in the banking system and to give the commission one yeaer to report on its views;
- to give the Bank of England control over macro-prudential regulation and oversight of micro-prudential regulation; and
- not to join the Euro.