Plans to prevent another credit crunch
- 00:02:10
- ITN
Plans to prevent another credit crunch
A raft of measures to help regulate banks and curb excessive lending in the wake of the credit crunch is due to be unveiled. Chancellor Alistair Darling is to suggest using alerts, similar to those already employed on cigarettes and fatty food, for pensions and mortgages. The White Paper will also impose tougher capital ratios for banks during boom times and a "tax on size" to prevent balance sheets ballooning out of control. But Mr Darling will not touch on the controversial issue of bankers' bonuses. What will feature heavily is that the Tripartite system set up by Gordon Brown - with duties shared between the Bank, FSA and Treasury - is to remain largely unchanged. The three-pronged approach to bank regulation was heavily criticised for failing to foresee the credit crunch. But a new committee chaired by the Bank of England Governor Mervyn King - comprising staff from the Bank and the FSA - could be proposed to oversee wider financial stability. Mr King has called for more powers to discharge the Bank's responsibility for ensuring financial stability, although the FSA may also be in line for a boosted role. The Governor also raised speculation over a clash with Mr Darling recently by warning that banks must not be allowed to become "too big to fail".
ITN | July 8, 2009
