UK government mulls giving BoE new payment supervision powers
BoE would oversee firms within the broader ‘payment chain’
The UK government will consult on whether to expand the Bank of England’s supervisory powers to cover systemically important firms involved in “payment chains”.
According to the government’s Payment Landscape Review, an increase in the use of digital payments has resulted in payment activities being conducted by firms other than traditional banks and payment service providers.
These new firms have the potential to become systemically important, the government acknowledged in its review, and therefore may “warrant Bank of England supervision”.
“The bar for systemic importance and Bank of England supervision would remain high, as it is for payment systems at present,” the review said.
Under the Banking Act, the BoE currently supervises systemically important payment systems – infrastructures that could pose financial stability risks should they falter.
The act allows the Treasury to “recognise payment systems” and bring them within the BoE’s supervisory remit.
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