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New banking laws revealed

New banking laws revealed

Category: Credit cards

Updated: 27/11/2009
First Published: 18/11/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Details of the new Financial Services Bill aimed at strengthening and reforming financial regulation have been outlined in the Queen's Speech.

Under the new bill, measures are to be taken to give further protection and support to consumers in relation to financial services, including the introduction of a national money guidance service.

A ban on unsolicited credit card cheques will be introduced to prevent lenders from encouraging customers to borrow more than they can afford

Meanwhile, groups of consumers will be allowed to bring court actions against financial institutions.

On a more general level, a new Council for Financial Stability is to be created comprising of the Treasury, Bank of England and the Financial Services Authority (FSA).

The powers afforded to the FSA are to be increased to ensure they can better regulate the banks, while action is to be taken regarding remuneration to ensure bankers cannot be rewarded financially for taking undue risks.

Larger banks and financial institutions will also have to set up so called living wills, making it safer and easier to wind them down in the event of a crisis.

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