The draft Financial Services (Banking Reform) Bill contributes to the European and international debate on banking reform and comes 11 days after the publication of the Liikanen report on the reform of the European banking sector. That report strongly supports a bail-in tool and a requirement for the structural separation of banks' trading activities from retail deposit-taking, and is thought by the Government to be compatible with the Independent Commission on Banking (ICB) reforms.
The Government has also confirmed its policy in relation to a number of other related reforms, some of which will be published in the version of the Bill to be laid before Parliament early next year. The Bill is primarily a piece of framework legislation, which means that much of the detail will be implemented through secondary legislation - without undergoing critical pre-legislative scrutiny.
Read further to consider points including ring-fencing, primary loss absorbing capacity, depositor protection, levies, treasury powers, FSCS statutory duties, strategy setting and loss absorbency and competition recommendations.