Press Release Summary: In order to bring more stability and strengthen the UK so that no economic crisis happens here, the Prime Minister, Gordon Brown is putting his efforts.
Press Release Body: In order to bring more stability and strengthen the UK so that no economic crisis happens here, the Prime Minister, Gordon Brown is putting his efforts. He has initiated this by refurbishing the authorities that have been assigned to the Bank of England and the Financial Services Authority.
The Parliament last week witnessed the introduction of the Banking Reform Bill by Prime Minister Brown. The bill has taken stride to improve the stance of the Bank of England and will provide it more authority and power. The Bank of England, after the introduction of this bill which will happen later in the year, will carry the power of provision of short-term liquidity to banks. There will be no funding issues or any disclosure as to how much has been given to whom.
For those banks that are in a problem, the government wants that the FSA should gather information and provide them with the necessary assistance that they require. For this, a special resolution is being called for so that the Northern Rock-style financial crises can be avoided and dealt with.
The government claims to be working internationally with the help of partners like Financial Stability Forum and the European Union so that the global financial system altogether can be stabilized. This will however involve that the ability of banks to manage the risks involved are improved and the proper functioning of the securitization markets and credit rating agencies.
The Banking Reform Bill is being supported by the Financial Services Authority since it is a measure to enhance the stability of the financial system. Also, the extension of the powers of the FSA to share information and the BoE's power to provide liquidity without publicizing it is being welcomed by the Council of Mortgage Lenders. The CML however is ready to accept it as a solution only after studying the details of the legislation.
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2022
