The United Kingdoms Financial Regulation System

Published Date: 02 Nov 2017

UK financial regulation is a huge based module, so they are focusing in the point and structure of United Kingdom financial services structure. Most of the regulation financial markets responsibilities have taking care by HM Treasury and after that the responsibility will be sharing between the bank of England and the financial services authority. in this days, the bank of England trying to get the stability of the financial system, and the bank of England’s conversion the operation of monetary policy. There is many functions on the financial services authority, the first is authorization of market participants, the second is prudential supervision of banks, the third is insurance companies, then securities firms and fund managers, then regulation of their conduct of business, then investigation, then enforcement and discipline, then regulation of investment exchanges and clearing houses, finally regulation of collective investment schemes. There has been a big change in the regulation after they move away from largely self regulation and then it is became a combination of self regulation and government interventionist regulation. The UK used to totally depend on private regulation by the stock exchange by institutes of chartered accountants and that was before 1997.The regulation of the financial system in the UK however is not as explicit as the system in the US where the Securities and Exchange Commission holds some of the most extensive regulations, which are viewed by some as being excessive (Benston, 1985).

This days the bank of England have create a new financial policy committee after they got all the control of the prudential regulation by that the old financial services authority has been dismantling by the government . the bank of England will create two new regulation which will make the new system one of the best system they have, and it could be the top. The first regulation is prudential regulation authority and it will be charged with regulating bank and other financial institution and it will work under bank of England regulation. The second will be a new Consumer Protection and Markets Authority. And it will be a agency for economic crime so everyone will be responsible in the parliament so every time you will ask for the person in charge you will have answer and not like before, moreover it will start the new regulation in 2012 as the government mention. The banking commission are looking for the competition between the banks and the financial institutions in the new system, and in the new system it will be possibile that the bigger banks will be breaking up and fail.

The uk system trying the best to ensure the financial markets that it is efficient working good and organization, so what they do is compromise between the self regulation and statutory regulation. The uk markets has been reinforces by the financial services authority, for example when a company want to list in the stock exchange. They have to follows the requirements of the previous self regulatory and in addition to the United Kingdom Listing Authority, what is mean the body of the financial services authority. All of the tow systems working together and have powers of institution revelation needs, all the company have to be agreement of provisions and enforcement values.

All over the work the regulation of financial markets has been change in UK and in Europe and also in USA and other places. the EU has been changed a lot in the priorities of government when they have problems in changing or in the regulation of financial system, and it is one of the biggest issues that face the regulation of markets and they getting help from other jurisdictions

Quinn's 1992 they saying in the article and make it sure that the agreement of banking rules in the EU and the organization of countries own the regulatory standards and centralisation of EU included financial market they are needed to be fast reaction for any problems in the future for example market failure(Quinn, 1992)..Values differ greatly across countries. Ireland’s Central Bank is the primary regulator of financial markets. In the UK, the newly established financial services authority has taken over the pedals from the Bank of England and in Denmark they have independent regulatory authority also, there is a lot of differences and not only in the institutions, there are a huge variations in the powers of these contradictory institutions and not only in the institutions. the system is viewed as, in Ireland, they are far too scrappy to be effective Any powers of investigation and enforcement are unclear and appear unsuccessful. in German they have financial regulator also, and it was recently been questioned in how they use their regulation. the the Neuter Market for the growth stocks, it is just inform that they put new rules which going to improve the flow company information to investors and make it better. moreover, by this new rules they hope that willl make the investors feel confidence again on the market. insider dealing investigations and insolvencies. The article argues that the rules are long overdue.

"They still do not afford investors the transparency found in the UK, with its more established equity culture", (Financial Times, 2001). Stewart’s suggestion of ‘an umbrella grouping, under an appropriate directive, at EU level which will collate information and provide expertise on legislative detail in different countries" (Stewart, 1995), so they need measure to make the differences in the EU a little closer and similar together, while Europe struggles with coordination difficulties. the real question if the statutory government regulation in useful to markets and they still constantly debated or not.

In government regulation usually stated case is based on the truth that the market failure it is real happen so therefore have to protect the market from failure, so the first function is to protect the public interest and the reasons because it is natural difficulties on the financial services industry for example the difference in the information asymmetries which is make the market fail. Paid to banks when evaluating regulation of financial markets it is what need for more attention because they have an important part of the financial sector.

public people need for protection against these bank runs which gives rise for the need involvement to provide this kind of protection The "State guarantees to depositors and guarantees by central banks to act as lender of last resort may prevent sudden losses." (Stewart, 1996).

There is a two kind of risk sharing function in every bank all over the word. they should have a well diversified folders of resources which could give fixed returns for a period time for depositor's investment and they also should have a part of liquidity. Because of the difference of the assets and liabilities are found within the banks they created the tow function so they can solve the problem. The documents that risk sharing contracts usually those make the bank very susceptible to runs. banks could be affected in the solvency by another bank when it is got failure and they losing money and confidence and important withdrawals, "usually as a result of a mismatch between the date to maturity of assets and liabilities" (Stewart, 1996). The public could get severe affected by bank runs, because the banks it is the most common place of people carrying out their money and the financial transaction for example savings money and mortgages. The trader and the other public people love to have an natural faith in the banks and the depositors have a reduced ability for evaluating and monitoring the banks. Banks will not put strict self regulations unfairly. The danger of this situation is that banks could not provide put professionally.

some people was against the government involvement and they said it should be possible to the bank to be in any levels of financial and in any time in the market, witch make the survival of emergency financing, moreover the bank will be careless about the risk levels cause the central bank will help with any problem. the truth is banks hold forms of liquidity debt financing, what is mean if the bank run happen it could not be possible to liquidate his debt. it was been suggested on the real effects of the banking fail that is fail in the macro economy . Quinn suggests of the banking collapse has effected on the dept and the time of depression which followed (Quinn, 1992). Combined with the need of motivation on depositors’ behalf to check and screen banks. .

though, the establishment of these ratios it is make a real problems to the banks and there regulation, from the function of the bank is to required from both of define and measure capital and income. as the income is become into capital on balance sheet. they make in the regulation much emphasis placed on the measurement of income, moreover there is more problem witch need to take care of such as who should measure capital and income.

Reverencing:

no author. ( 2010). Q&A: Osborne's financial regulation reforms.Available: http://www.bbc.co.uk/news/10343900. Last accessed 6th may 2011.

Quinn, T.P. ‘The Economics of Financial Regulation: A Survey.’, Central Bank of Ireland. 1992

Leader, ‘Neuer Markt’ Financial Times, Jan 3 2001

Stewart, J. ‘The Changing Nature of Financial Regulation in Ireland’ , Journal of Financial Services Research , 1996.

Steve Schifferes. (2009). Financial regulation. Available: http://news.bbc.co.uk/1/hi/business/8138705.stm. Last accessed 5th may 2011

no author. (2009). EU finance ministers agree new European regulation deal. Available: http://news.bbc.co.uk/1/hi/business/8391354.stm. Last accessed 7th may 2011.