Take more time to reform the Bank of England, MPs tell the coalition

Coalition ‘rushing’ banking regulation reforms

Coalition ‘rushing’ banking regulation reforms

Reforms of the way Britain's financial services are regulated are unnecessarily complicated and being rushed through parliament, MPs have warned.

The Commons' Treasury committee warned in a report out on Friday that the changes being introduced via the financial services bill were "crucial" and needed to be got right.

Ministers are determined to push through the law so the changes can be implemented early in 2013. They are amending the existing Financial Services and Markets Act 2000 rather than creating a new bill in order to do so.

"The proposed legislation is therefore much more complicated than it need have been," committee chair Andrew Tyrie said.

"No explanation has been given for the rush to produce the bill and place it on the statute book by the end of the year.

"Better to take a little more time, and get it right, than rush it."

The Lords will scrutinise the financial services bill when it arrives in parliament's upper House for second reading next week.

Ministers will find themselves under pressure to accept the recommendations of the Treasury committee, which is worried about the limited accountability on offer for the new regulatory structures.

The coalition proposes replacing the tripartite system of the Bank of England, the Treasury and the Financial Services Authority, which failed in the run-up to the financial crisis of 2008.

It wants to give the Bank of England oversight of regulation via a new financial policy committee.

MPs found these measures "defective" because of limited oversight, thanks to the Bank's "antiquated" and "outdated" Court, its governing body.

"The Bank must not be permitted to carry on with an outdated Court," Mr Tyrie added.

"We must ensure that the Court can operate, as far as possible, according to corporate governance best practice."