New Banking Act comes into effect

The UK’s new Banking Act, which gives greater powers of intervention to the Bank of England, is coming into force.
The act enables the Bank to intervene more quickly to help troubled banks and protect investors.
The Bank will be able to give hidden support to stricken banks, with the aim of maintaining financial stability.
However, critics of the act say it throws a cloak of secrecy around the banking world, which could be detrimental for consumers.
The act allows certain decisions to be exempt from disclosure under Freedom of Information laws.
If a bank collapses, the act allows for savers to receive compensation within a week.
At present, payouts for savers with failed banks can take weeks, leaving many customers concerned about access to money in the interim.
Transferring customers from a failed bank to another should also now be easier.
One of the Bank of England’s formal objectives under the act is to maintain stability.
Peter Thal-Larsen, banking editor of the Financial Times, told the BBC’s Working Lunch programme the act will basically allow financial authorities to take early action to move savers’ deposits from a failing bank before tackling other problems.
„The idea is that, if there is a bank that gets into trouble, to insulate it and make the wider impact of that less, but I don’t think they can actually stop banks from getting into trouble in the future,“ he said.