Regulation will get tougher, UK banks warned

23 October 2012

More stringent controls are to become the norm for British banks after a new regulatory body is set up next year.

That is according to Andrew Bailey - thought to be a leading candidate to head the new Prudential Regulation Authority (PRA), which will be launched on 1 April 2013 - who has insisted the days of "light touch" supervision are over, Reuters reports.

Mr Bailey has outlined proposals whereby financiers would be required to provide detailed forecasts to the regulator, which would then hold the power to order the companies to raise more capital or alter their business plans.

It is hoped such increased levels of control over the industry will help create a system whereby there is no repeat of the banking crisis, when several financiers required state-funded bailouts.

"We need to spend more time looking closely at business models, asking questions such as where does the firm make money and is this sustainable," Mr Bailey added.

By Asim Shah

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