Darling signals shake-up of UK’s financial system

Chancellor Alistair Darling will this week signal the biggest shake-up of
UK’s financial system in a decade, in a response to market conditions and the
Northern Rock collapse.

In a speech at Mansion House this Wednesday, Darling is expected to give
further details of his plan to strengthen the Bank of England (BoE)’s role in
promoting financial stability, including bringing in City experts to advise
Mervyn King, the governor, and reforming the bank’s governance, the
Financial Times reports.

The chancellor is also expected to reveal details of his plan to give the
Financial Services
(FSA) new powers to intervene in a failing bank, including the
right to seize deposits and bring in new management.

Moreover, Darling is expected to concede to some of BoE’s demands for a more
prominent role in overseeing the implementation of these emergency powers.

Further reading:

Overview: FSA – toothless watchdog?

Darling plans City oversight panel for BoE

the Financial Times story

Related reading

Fiona Westwood of Smith and Williamson.