U.K. Treasury chief Alistar Darling noted that while the current regulatory framework for the banking system would remain largely unchanged, new rules and stricter punishments will ensue, reports The Wall Street Journal.
Darling’s plan will cost banks more, which will need to set aside more capital to cover losses. Banks will have to build up capital buffers during good economic times in order to accrue a cushion should the economy falter going forward.
The government also backed a newly created code on banker’s pay that was devised by the U.S.’s financial regulator, the Financial Services Authority. The code is designed to alighn pay with long-term profit by deferring bonus payments—however it will not cap pay.
Politicians and some analysts are worried that there aren’t enough changes as the system was designed 12 years ago by Prime Minister Gordon Brown—which allowed the crisis to occur with its failure to curtail excessive risks and debt.