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Financial Services Bill

It is clear that we need maximum insight, intelligence and appreciation of the factors that led to the bubble creating the crisis. This Bill indicates how the three institutions that I just identified are bound to play their part. The three functions have to be fulfilled in every economy with regard to financial stability. The essence is to make sure that they work effectively together to guarantee that we do not repeat weaknesses of the past. Clearly the communication and understanding between them about the development of that bubble was why the catastrophe occurred. Therefore, we conclude that the tripartite model is the right one. We intend to remain committed to the approach of having a single, independent financial services regulator in the form of the FSA, but it has to work better and we intend that it will. The council builds on the existing model, which the Government continue to believe is the right one, but it will bring real improvements compared with the old standing committee functions. Most importantly, it places financial stability arrangements on a more formal, transparent and accountable basis. We will make sure that there is more formality, for example, because the terms of reference are in the Bill laid before Parliament. We will make sure that there will be more transparency, as there will be quarterly strategic discussions which are publicly minuted.