Darling aims to shake up banking
Updated on 08 July 2009
The chancellor unveils his plan to stop the banks falling victim to another global financial crisis. James Blake reports.
The proposals include health warnings for financial products to show how risky they are.
The government's long awaited white paper will bring in tougher regulation and a range of measures to curb excessive lending.
The paper is expected to reveal what areas of regulation the treasury, the Bank of England and the Financial Services Authority will be responsible for.
The chancellor is set to suggest using alerts, similar to those already employed on cigarettes and fatty food, for pensions and mortgages.
A three-pronged strategy will focus on beefing up regulation, improving management of banks, and giving consumers a "fair deal".
The document is expected to endorse recommendations on tougher capital and liquidity requirements for banks, put forward earlier this year by Financial Services Authority (FSA) chairman Lord Turner.
It will also set out a range of options for curbing excessive lending, such as imposing tougher capital ratios for banks during boom times, and a "tax on size" to prevent balance sheets ballooning out of control.
A new committee chaired by the Bank of England Governor Mervyn King, comprising staff from the Bank and the FSA, is also likely to be proposed to oversee wider financial stability.
