radical 根本的な; 徹底的な
Curbs on risky banking proposed
Lord Turner's proposals have been eagerly awaited by many
Proposals aimed at overhauling the rules governing UK banking and stopping a repeat of the financial crisis are to be unveiled by the City watchdog.
The Financial Services Authority will put forward new rules on lending and seek to restrict the ability of banks to take excessive risks.
The plans will aim to stop banks lending too much during boom years, which may include limits on home loans.
Banks may also be required to build up reserves in healthier economic times.
The proposals will be unveiled by FSA chairman Lord Adair Turner.
BBC business editor Robert Peston said: "He will say that banks should be forced to hold more cash or liquid investments, to make them less vulnerable to collapse when other sources of finance dry up."
The tragedy, perhaps, is that it's required financial calamity to bring about an outbreak of common sense
BBC business editor Robert Peston
Lord Turner will also recommend that banks publish more and clearer information in their accounts about the risks they are running.
And a proposal to form a new pan-European body will be mooted, to set standards for other regulators to follow.
"Most significantly Lord Turner will repeat his pledge that the FSA will become less trusting that banks are usually doing the right thing; the FSA will abandon the prevailing dogma of the past 30-odd years that the market is always right," said our correspondent.
"In a way, little of this is terribly surprising. The tragedy, perhaps, is that it's required financial calamity to bring about an outbreak of common sense."
Lord Turner has already said his plans will amount to "a revolution".
A shake-up in the relationship between the FSA, the Bank of England and the Treasury is also set to be proposed.
It comes after John Varley, chief executive of Barclays, told the House of Lords economic affairs committee that responsibility for the banking industry "somewhat fell through the cracks".
"We should take advantage of the calamity of the last two years and ensure we do learn and have in place a structure of supervision to spot these risks," Mr Varley said.
"There was misplaced confidence and we all made mistakes," he added.
Last month, Lord Turner told a Treasury committee that the FSA's failure to spot the banking crisis in advance had been partly due to the style of regulation, with a "light touch" approach seen as politically preferred.
The tripartite arrangement, in which the three authorities have different roles, has been widely blamed for the events which led to the nationalisation of Northern Rock and Bradford & Bingley, and the huge losses at the likes of Royal Bank of Scotland.
The problem for the FSA is that the [banking] industry is global - but the FSA is local
Bob Penn, Allen & Overy
Critics of the system - introduced by then-chancellor Gordon Brown in 1997 - say that regulation had become confused.
This meant that none of the key players fully knew who was overseeing the UK's financial system, meaning that flawed banking models, such as that at Northern Rock, fell through cracks in the regulatory network.Last year the Treasury committee accused the FSA of "systematic failure" for not spotting the Rock's "reckless" business plan.