A consultation document from the UKâs Coalition government outlines a strategy to set up a new Financial Policy Committee (FPC) in the autumn of 2010.
The creation of the FPC would provide the BoE with powers of macro prudential regulation.
It will be headed up by the BoEâs new deputy governor with Hector Sant, the current chief executive of the Financial Services Authority (FSA), to be the first to take up the position.
Mark Hoban, financial secretary to the Treasury, said: âThe Coalition government is delivering on its commitment to reform the financial system, to avoid repeating the mistakes of the recent financial crisis and to ensure that taxpayers are protected. â
He added that the launch of the consultation is a âcrucial milestoneâ in its attempts to reform the industry.
The document also includes plans to create a Consumer Protection and Markets Authority, which would police conduct within the financial markets.
By Jim Ottewill