Bank regulation Techniques
Financial regulation and supervision within the United Kingdom has a history of being very informal, though this could be argued to be more efficient . Regulation can be seen as "the narrower process of setting rules, both by supervisors and by law" , though it should be noted that regulation should not have the effect of guaranteeing that firms will never fail. The specific purpose of regulation is to "ensure the safety and soundness of the financial system and economic neutrality in the allocation of credit with the ultimate goal to safeguard confidence in the banking system" . As an upshot of the secondary banking crisis in the early 1970's the 1979 Banking Act was introduced . This set out the first regulatory requirements which banks had to adhere to . The collapse of Bearings and the Bank for Credit and Commerce International (BCCI) prompted further regulations to be introduced and this was through the Banking Act 1987 . The current legislation is under the Financial Services and Markets Act 2000 which came into force on 1 December 2001. This transferred the task of regulating the banking industry from the Bank of England to the Financial Services Authority (FSA), and treats core banking as "just one more financial service to be regulated" . …
