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| Version 0 | Version 1 |
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| Darling to propose new bank laws | Darling to propose new bank laws |
| (10 minutes later) | |
| Chancellor Alistair Darling is to set out new bank laws aimed at preventing another Northern Rock-style crisis. | Chancellor Alistair Darling is to set out new bank laws aimed at preventing another Northern Rock-style crisis. |
| He is expected to propose forcing banks that seek emergency funding to accept being run by a restructuring officer appointed by the government. | He is expected to propose forcing banks that seek emergency funding to accept being run by a restructuring officer appointed by the government. |
| The Financial Services Authority (FSA) is expected to get new powers despite being criticised by committee of MPs for its handling of Northern Rock. | The Financial Services Authority (FSA) is expected to get new powers despite being criticised by committee of MPs for its handling of Northern Rock. |
| There will be a 12 week consultation period on the new legislation. | There will be a 12 week consultation period on the new legislation. |
| The tripartite system under which the FSA, the chancellor and the Bank of England work together to deal with emergencies has been criticised for failing to prevent the first run on a UK bank for more than a century. | The tripartite system under which the FSA, the chancellor and the Bank of England work together to deal with emergencies has been criticised for failing to prevent the first run on a UK bank for more than a century. |
| But that system is expected to remain in place under the new proposals. | But that system is expected to remain in place under the new proposals. |
| The consultation is also expected to discuss what amount of bank deposits should be protected. | The consultation is also expected to discuss what amount of bank deposits should be protected. |
| Currently, savers have the first £35,000 in each account guaranteed, but the chancellor is likely to suggest extending that. | Currently, savers have the first £35,000 in each account guaranteed, but the chancellor is likely to suggest extending that. |
| He may also propose that the protection scheme for depositors should be funded by the banks up-front. | He may also propose that the protection scheme for depositors should be funded by the banks up-front. |
| Opposition proposals | |
| The Conservatives have already put forward their proposals for changes to banking legislation. | |
| They want to give the Bank of England new pre-emptive powers to deal with failing banks, instead of the FSA. | |
| They are also proposing raising the limit for protected savings from £35,000 to £50,000. | |
| But the Conservative plans do not support the idea of up-front payments from banks to fund the deposit protection scheme. | |
| Instead, the banks would pay for the scheme if a bank collapses. | |
| They have also proposed extending the term of office for the governor of the Bank of England from four years to a non-renewable eight years and urged the government to confirm the re-appointment of the current governor, Mervyn King. |