How a Tory government would regulate and police the banks

The media may have focused on Gordon Brown's encounter on the streets of Rochdale for most of the day, but other elements of the election campaign have continued apace elsewhere.

Today George Osborne launched a document, Change for the better in Financial Services, setting out how a Conservative government would introduce "the most radical overhaul for a generation in the way that banks are regulated and policed".

It contains the following key pledges:

• We will take action in our first Budget within 50 days of the election to get credit flowing to businesses with government guarantees, building on our proposals for a National Loan Guarantee Scheme.
• Within months we will take the first steps towards sweeping away Gordon Brown’s failed system of regulation and putting the Bank of England back in charge by creating a new body – the Financial Policy Committee – to monitor credit conditions and the growth of debt in the economy.
• We will start immediately on the design of a new bank levy, with the aim of introducing it within a year of the election.
• The bank levy will help to bring down remuneration across the banking sector. We will also empower the Bank of England to crack down on risky bonus structures.
• Unlike Labour we will push for international agreement at the G20 and other forums to separate the riskiest investment banking activities like large scale proprietary trading from retail banking.
• We will start work on the creation of a tough new Economic Crime Agency to crack down on white collar crime and sweep away the confused alphabet soup of agencies that are currently responsible for tackling serious economic crime.
• We will start work on the creation of a new Consumer Protection Agency to take over the roles of the Financial Services Authority and the Office of Fair Trading when it comes to protecting consumers of financial products.
• Within a year we will set up a free financial advice service and a free annual financial health check, to help families get their finances on track.

Click here to download the document.

Jonathan Isaby