UK's Brown Vows Tougher Bank Regulation In New Law

LONDON (AP) — British Prime Minister Gordon Brown said Sunday that the government will announce new legislation next week to toughen banking regulation and let customers take collective action against errant financial institutions.

In a podcast on the 10 Downing Street Web site, Brown said the government "will ensure that the banking crisis we have experienced over the last two years should never again come at a cost to the taxpayer."

"This means a transformation of the way the financial sector is policed, with banks themselves and not the taxpayer made to pay for bank failings," he said. Brown said consumers would be empowered "to hold banks to account by taking collective action to get redress when many people feel that they have been badly treated."

Brown said the reforms will be announced as part of Wednesday's Queen's Speech, in which the government lays out its plans for the next session of Parliament.

Treasury Chief Alistair Darling said the Financial Services Bill announced in the speech would give regulators the power to stop bankers from pocketing big bonuses that could destabilize the financial system.