Regulation and control of the United Kingdom banking and financial structure

Abstract

Britain has tended to avoid, except as a last resort, formal regulatory arrangements. Indeed, bank regulation so far has largely been by “suasion”, with no formal framework for bank examination and inspection. There seems now, however, to be an awakening interest in the possibility of a more comprehensive regulation of financial institutions, due in part to the splitting off a “secondary” banking system, and the emergence of a complex of parallel money markets. The present work analyses the regulation and control of the banking and financial structure in the United Kingdom. The author first briefly considers the extent of relevant legislation that is currently found on the statute books. The main objectives of any comprehensive legislation to regulate banks and similar financial institutions are then outlined. Finally, the appropriate legislation to achieve such objectives is considered.

JEL: G18, G28