UK’s FSA sets sights on retail banking
The UK financial watchdog has issued proposals for retail banking regulation
LONDON – UK banks’ retail operations could soon be more closely regulated, according to new proposals released on Tuesday, November 4 by the Financial Services Authority (FSA). The proposal, if enacted, would lessen the degree of self regulation afforded to the retail banking sector.
Retail banking is covered by sections of the UK Banking Code, enforced by the Banking Code Standards Board, which has until now acted as the middleman between banks and the hands-off regulator the FSA. The new proposals are but one area of the UK’s efforts at banking reform.
The FSA’s existing Treating Customers Fairly (TCF) regime already features measures aimed at increased consumer protection for retail banking. But the regulator has stated its intention to tighten TCF enforcement, and the new proposals look like a measure to cement this intention.
Eric Leenders, head of the retail policy team at the British Bankers’ Association, told the Financial Times: “We want to make sure that whatever the underpinning regime might be – and we appreciate this would simplify it –it is a comprehensive step and we don’t see some areas orphaned.”
The UK regulator is also preparing to assume responsibility for new retail transaction rules under the European Union’s Payment Services Directive, which will come into force in November 2009. In addition, it will take on new emergency powers under the Special Resolution Regime, as part of the UK tripartite authorities’ banking rescue legislation.
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