At a glance: Banking reform proposals

The Bank of England, the FSA and the Treasury currently regulate together

The main political parties have all put forward their plans for reforming financial regulation in the UK.

The current tripartite system of regulation, introduced by Labour in 1997, shares responsibility between the Bank of England, the Financial Services Authority (FSA) and the Treasury.

But the system has been criticised for the institutions failing to communicate adequately with each other, and for not making it clear who would be in charge in a crisis.

Here is a summary of the proposed reforms:

LABOUR

• Maintain the current tripartite system
• Set up a new Council for Financial Stability - made up of members of the FSA, the Bank of England and the Treasury - to meet regularly and report on the systemic risks to financial stability
• Require banks to hold more capital to cover any future losses and more powers for regulators to take over failing banks
• Require the FSA to report yearly on whether banks have met the new code of conduct on executive pay
• Set up a national money advice line funded by the banks and strengthen the current deposit protection scheme to provide more help for consumers
• Require the FSA and the Office of Fair Trading to ensure greater competition and that new players can enter the banking market

CONSERVATIVES

• Abolish the current tripartite system
• Give the Bank of England responsibility for maintaining financial stability, with powers to regulate pay structures and require banks to hold large amounts of capital
• Set up a new Financial Policy Committee, within the Bank of England, but also including independent appointees, to supervise financial institutions. The committee would have tools to rein in bank lending
• Abolish the FSA, replacing it with a Consumer Protection Agency
• Appoint a senior Treasury minister with responsibility for European financial regulation
• Ask the Office of Fair Trading and the Competition Commission to investigate the effects of consolidation in the retail banking sector, and consider separating riskier banking activities from retail banking
  

LIBERAL DEMOCRATS

• Abolish the current tripartite system
• Leave the FSA as a unitary regulator, with the governor of the Bank of England having overall responsibility for systemic stability
• Require highly-paid bankers to publish details of their remuneration
• Retain a long-term role for state banking
• Break up publicly-owned institutions, such as RBS and Lloyds, before returning them to the private sector
• Abolish the Asset Protection Scheme, which insures banks' riskiest assets