FACTBOX - Conservatives' key bank regulation proposals
LONDON (Reuters) - The Conservatives put forward detailed proposals on Monday on how they would reform banking and financial market regulation if they win a national election due in less than a year.
In a 52-page document, "From crisis to confidence: Plan for sound banking," the Conservatives proposed to:
-- Abolish the Financial Services Authority and the current tripartite regulatory system and beef up the Bank of England with powers to ensure financial stability.
-- Make the Bank of England responsible for macro-prudential regulation, judging and controlling risks to the financial system. This would "restore the Bank's historic role in monitoring the overall level of credit and debt in the economy," the Conservatives said.
-- Create a powerful new Financial Policy Committee within the Bank, working alongside the Monetary Policy Committee, to monitor systemic risks, operate new macro-prudential regulatory tools and execute a special resolution regime for failing banks.
-- Make the Bank of England responsible for the micro-prudential regulation of all banks, building societies and other significant institutions, including insurance companies.
-- Create a new Financial Regulation Division of the Bank to carry out this micro-prudential role, headed by a new Deputy Governor for Financial Regulation.
-- Reform the structure of the Bank to reflect its new role and to ensure that monetary policy, financial stability and the regulation of individual institutions are closely coordinated.
-- Conduct a review in government, involving the Governor of the Bank of England, to consider the case for putting housing costs back into the inflation target. Any change should be carried out in a careful way, with extensive consultation. Continued...
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