On 12 November 2012, peers concluded a second day of report-stage scrutiny of the Financial Services Bill, which overhauls regulation of the financial services sector.
The bill proposes replacing the so-called tripartite structure introduced by the previous Labour government, under which oversight of the banking system is shared between the Bank of England, the Financial Services Authority (FSA) and the Treasury.
Under the terms of the bill, four major changes will be made to the Bank of England:
- a Financial Policy Committee will be established to look after the general well-being of the UK financial system
- a new Prudential Regulation Authority will monitor the performance of banks and other companies that manage significant risks on their balance sheets
- the effective and fair functioning of markets will be enforced by the new Financial Conduct Authority
- the regulation of clearing houses will become the Bank's responsibility.
The legislation also gives the chancellor of the exchequer the power to veto decisions made by the Bank of England when dealing with bank bailouts and other interventions.
The Financial Services Bill was introduced in the 2010-12 session of Parliament and a carry over motion was passed on 6 February 2012.