Darling launches Bill to reclaim bank bonuses

Author: By Alistair Dawber

The Financial Services Bill will put into law a number of measures that the Government has already announced and those agreed with the G20 on reforms to the global financial system.

“The Bill we are introducing today is central to the Government’s reform agenda that seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions,” Alistair Darling said.

As well as powers to act against banks, the Financial Services Authority (FSA) will have “information gathering powers extended to non-regulated firms, including hedge funds, where information is relevant to financial stability”.

Hedge funds, and other firms not regulated by FSA, are also facing new rules on disclosure from the European Commission. Short sellers, who were widely blamed for driving down the share prices of several vulnerable banks at the height of last year’s crisis, will also be forced to disclose short positions.

Other measures in the White Paper include new powers for consumers to collectively challenge banks in court, and the requirement that banks have a “living will” to ensure that they can be wound down without taxpayer support.

The Conservatives, who are widely tipped to win next year’s election, have already pledged to axe the FSA and extend the powers of the Bank of England to oversee financial sector reform.

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