Bank Regulators and Conclusion

The UK’s bank regulator changed in the period. FSA was the only institution regulates the banking industry until 2013. Nowadays, two successor authorities are in charge of banking. It ended the era that labour government organised financial system in the UK. (BBC News)

The Prudential Regulation Authority (PRA), as a part of BoE, not only regulates and supervises banking sector and other financial institutions at the level of individual firm with the standards it sets, but is responsible for the protection and enhancement of the UK financial system’s stability as well. It has two following statutory objectives which developed by two tools, namely, regulation and supervision.

1. ‘To promote the safety and soundness of these firms and, specifically for insurers;

2. To contribute to the securing of an appropriate degree of protection for policyholders.’

Although BoE did not conduct, the board of PRA involves governor of BoE makes supervisory decisions and ‘is accountable to the Parliament’ indeed. This approach does not pursuit a ‘zero-failure’ regime. It reduces the pressure of regulation and encourages the regulator work better.

The other main regulator, the Financial Conduct Authority (FCA), is independent of the UK government. This authority has principal powers, for instance, regulate implement of marketing of financial products. According to the Financial Services Act of 2012, it supervises banking sector with a new system. In detailed, supervisions have three targets:

1. ‘To ensure they treat customers fairly;

2. To encourage innovation and healthy competition;

3. To support identification of potential risk early’.

FCA mainly regulates financial services firms, playing a role as Watchdog for City’s Behaviour. It contributes to promote economy in the UK. On the other hand, it has effect, i.e. interest rate.

To sum up, I have addressed specific regulations and regulators relating to this issue. Basel Accords and Banking Act challenged by sub-prime financial crisis and the latest one is shown with advanced improvement. The replacement of regulators opens a new age for banking system. In this research, lack of practical cases limited the outcome and less consideration for early Banking Acts is shortcoming, too.