Treasury has published a briefing for peers on the Financial Services (Banking Reform) Bill (the Banking Reform Bill) ahead of its Committee hearing in the Lords on 8 October. The briefing explains how the Banking Reform Bill implements the changes proposed by the Vickers report and the subsequent recommendations of the Parliamentary Commission on Banking Standards (PCBS). It then focuses on the amendments the Government intends to introduce following further PCBS recommendations, which include:  

  • a streamlined procedure for banking group separation under the "electrification" power;
  • reforms to the approved persons regime which will, among other things, reverse the burden of proof in regulatory actions against senior managers and give regulators the power to make banking standards rules that will apply more widely than just to approved persons;
  • criminal sanctions for reckless misconduct by senior managers;
  • creating a new payments systems regulator;
  • introducing a bail-in tool;
  • giving PRA a limited rule-making power over financial holding companies; and
  • introducing a special administration regime to deal with failure of a payment and settlement system operator or key service provider. 

Parliament has also started to publish the amendments tabled for discussion in the forthcoming Committee stage. (Source: Treasury Briefs Lords on Banking Reform Bill and Banking Reform Bill Documents)