[JURIST] UK Chancellor of the Exchequer Alistair Darling [official profile] on Monday urged banks to cut back on bonuses immediately instead of waiting for legislation following an agreement reached at last week's G-20 summit. In a speech to the Labour Party [party website] conference, Darling said [FT report] that he hoped banks around the world would all cut back on bonuses but acknowledged that British legislation would not be in place until after this season's round of bonuses. Darling also introduced a new Fiscal Responsibility Act [WSJ report] that will require the government to reduce the country's deficit, which currently stands at £800 billion. Specific plans for reducing the deficit will be laid out over the next several weeks in the Pre-Budget Report.

The US has also been taking steps to increase financial industry oversight. Earlier this month, US President Barack Obama [official website] stressed the need for stronger financial industry regulations [JURIST report] in a speech [transcript] marking the one-year anniversary of the collapse of Lehman Brothers Holdings. In July, the Obama administration sent Congress [JURIST report] draft legislation [press release and materials] that would put the Federal Reserve [official website] in charge of regulating the largest financial firms. The proposed legislation would create an eight-member Financial Services Oversight Council to pinpoint risks in financial markets and would establish a National Bank Supervisor and Resolution Authority. It would also create within the Department of the Treasury [official website] an Office of National Insurance, the director of which would be charged with identifying gaps in industry regulation that could lead to crises in the insurance or financial systems.