U.K. Lords Approve Final Stage of U.K. Financial Services BillSvenja O’Donnell
The U.K.’s House of Lords passed the government’s financial services bill late yesterday, the final stage before changes to the country’s banking industry can become law.
The vote marks “the final legislative phase of the government’s plan to create a banking system that supports the economy, consumers and small businesses,” the Treasury said in an e-mailed statement late yesterday. The bill includes a number of amendments introduced by the Parliamentary Commission on Banking Standards, to strengthen the “ring fence” separating retail banking from risky investment, and allowing banks flouting the rules to be broken up.
The legislation will “make the U.K. banking system stronger and safer so that it can support the economy, help businesses and serve consumers,” Financial Secretary to the Treasury Sajid Javid said in a statement. “The Bill will also help to deliver much-needed competition in the banking sector and increase the conduct standards amongst bankers.”
Facing elections in 2015, David Cameron’s Conservative-led government is keen to overhaul an industry that has been rocked by scandal, without damaging London’s competitiveness as a financial center.
Chancellor of the Exchequer George Osborne in the past month staved off the Labour Party’s push to amend the bill, introducing a licensing regime for bankers, which was finally rejected by lawmakers last week. In a concession to some proposals, the Treasury pledged last month that an independent review will also look at whether proprietary trading is endangering banks or their customers.
The cross-party Banking Commission was established by Osborne in the wake of the Libor-rigging scandal under the leadership of conservative lawmaker Andrew Tyrie, who chairs the House of Commons Treasury Committee. In its report in June, it advocated delays of as long as a decade for bonus payouts and making the reckless management of lenders a crime. In an effort to get some of its recommendations into law, Osborne added them to the existing Financial Services Bill, which was already passing through Parliament.
The bill becomes law after receiving royal assent.