The part of this year's Budget, announced on 24 March, that specifically affects financial services focuses on international and domestic issues. The key points include:

  • support for G20 and Basel Committee initiatives on capital, liquidity and protecting taxpayers from the cost of future crises. The Government identifies systemic risk tax as an early priority for an internationally coordinated effort – it says such a tax should complement other G20 initiatives for addressing systemic risk and should cover all financial institutions that might contribute significantly to the risk;
  • looking at additional measures with respect to institutions that pose the greatest systemic risk, including promoting living wills which are internationally consistent;
  • bringing forward detailed proposals in the summer on a regime for dealing with investment bank failure and working towards an EU framework for resolution;
  • supporting the new European regulatory infrastructure and noting the changes that key Directives, like Solvency II, will bring;
  • tackling non-cooperative jurisdictions in line with FATF and FSB measures;
  • reforming banking remuneration in line with FSB's principles. The Budget notes bonuses have reduced because of the one-off bank payroll tax and believes those who still choose to give substantial payments should contribute fiscally;
  • working on implementing the Walker Review recommendations, including consulting on whether the Government can take further practical measures to facilitate owner consent to executive remuneration;
  • supporting the asset management industry in working to ensure it is competitive, including review of many tax rules;
  • considering whether there is a need to reform any financial instruments, such as mortgage-backed securities;
  • promoting lending to the economy by agreeing new commitments with the Lloyds and RBS groups and to businesses by looking at all possible lending channels, including working to improve efficiency in the corporate bond and private placement markets (and may develop a sterling-denominated private placement market);
  • creating a Small Business Credit Adjudicator to help SMEs in need of credit;
  • promoting competition in the banking sector by allowing new entrants and supporting OFT's review of barriers to entry to retail banking and FSA's improvements in its licensing process, and introducing a universal service obligation to give more customers the right to a basic bank account;
  • continuing the work it has done on the Northern Rock and Bradford & Bingley fallout by integrating the two wholly government-owned companies that resulted from it under a single holding company;
  • reviewing exemptions for industrial and provident societies;
  • pressing ahead with plans to bring second-charge mortgages under FSA regulation and exploring protection for customers in buy-to-let markets and those whose mortgages are sold to unregulated firms;
  • discussing with mortgage lenders and HMRC a formal income verification service for lenders;
  • strengthening the administration regime for insurers; and
  • working with the Retail Financial Services Forum on better, more transparent products and on changing bank incentives to deliver better consumer outcomes.

Reacting to the Budget, BBA called it a "budget for the ballot box". It said that the Government had not considered the knock-on effect of its various proposed taxes and charges on costs to customers, that everyone who wants a bank account can have one and that it was not sure why the new credit adjudicator was needed. IMA welcomed the move to improve the tax position for UK regulated funds.