BRITAIN is to draw up legislation to bolster the role of financial regulators and make it easier to intervene in a crisis to help stem global turmoil, the Chancellor of the Exchequer, Alistair Darling, said last night.
A bill to be introduced in two weeks will be about "strengthening the supervision of the banking system, making it easier to intervene if a bank gets into trouble [and] giving new powers to the regulators," he said.
In a keynote address to the Labour Party's annual conference, Mr Darling said the Government would also be giving new protection to savers and that he had asked the independent Financial Services Authority regulator to "review urgently" how to improve the system.
"I can promise that wherever weaknesses are found in the financial system - whether in the powers of government, the Bank of England or the FSA - I will take steps to deal with it," he said.
In a frank assessment of global economic problems, he said it would take some time for the current uncertainty to be resolved. "We are on a difficult road and there will, I am afraid, be bumps along the way."
Mr Darling and the Prime Minister, Gordon Brown, are seeking to emphasise their handling of the credit crisis as polls point to defeat for Labour at the next election. Last week Mr Brown helped broker a takeover of HBOS to avert its collapse, following the filing for bankruptcy protection by Lehman Brothers. The economic crisis may push the Government to increase taxes and cut spending in the future as the slowdown drives up borrowing, Mr Darling suggested yesterday in an interview with GMTV
He ruled out taking immediate action to curb the budget deficit.
"In the medium term, all governments have got to live within their means," the Chancellor said. "But I don't think this is the right time to be taking money out of the economy."
In an interview with BBC radio, he said bonuses paid to financial traders and executives should not encourage risk-taking and that the British market regulator was examining the issue. But he dismissed calls from unions and some Labour MPs for rules to limit the payouts. "You need to remain level-headed here … We don't want to tell banks what to do in individual cases."
Agence France-Presse, Bloomberg
