BRITAIN’S government unveiled plans Tuesday to centralize financial regulation further at the Bank of England (BoE) and reinforce its own powers to shield taxpayers from having to prop up failing lenders in the future.

    British finance minister George Osborne published a consultation paper to reform the regulatory system just two years after a shake-up aimed at plugging gaps highlighted by a “light touch” regulatory regime that failed to spot the 2007-09 financial crisis coming.

    The government proposed making the Prudential Regulation Authority (PRA) an integral part of the Bank, ending its status as a subsidiary with its own board.

    The PRA makes sure that banks like HSBC, Lloyds, Barclays and Royal Bank of Scotland hold enough capital and do not take on too much risk.

    A new Prudential Regulation Committee (PRC) would sit alongside the central bank’s Monetary Policy Committee, which sets interest rates, and Financial Policy Committee (FPC), which sets the direction for regulation.

    The government said the PRC would retain the PRA’s freedom to make rules, policies and supervisory decisions.(SD-Agencies)