One of the main elements of the Bill is to introduce ring-fencing in order to separate their retail and investment activities and to make sure that when banks make losses, retail customers aren’t excessively affected and taxpayers’ money isn’t used to bail banks out.
HM Treasury has been consulting on Banking reform: draft secondary legislation which will set out key details of the ‘location’ of the ring-fence, including the scope of the ring-fence, the de minimis exemption from ring-fencing, the prohibitions on ring-fenced banks, and the precise conditions for exemptions.
Many organisations have been making representations to Government during the evolution of this legislation and the ACT has at earlier stages been engaging with HM Treasury on our own and jointly with the Law Society. The ACT has responded to the consultation making the specific point that the sorts of financial services the ring fenced bank can provide to its customers should be broadened. After discussions with the CBI we are pleased to be able to support some further points being made by in the CBI’s submission.