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Financial Regulation in the United Kingdom: Historical Foundations and Current Practices

Author

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  • Azizi , Ahmad

    (Melli Bank Plc, London)

Abstract

Financial markets have been developed rapidly in recent years. New and sophisticated financial tools have been the cause of these developments which need new controlling systems to prevent crisis. Most of industrial economies have reformed regulatory structure of their financial systems. This paper reviews the regulatory developments of UK in this regard and offers new regulations and accounting standards concerning financial activities. These regulations have undergone significant structural financial reforms over the past three decades principally aimed at changing the architecture of the financial sector and encouraging greater competition. These reforms offer a unique setting to explore empirical evidence from experiments with competing theories of regulation that is, studying the real world challenges and the pros and cons of self-regulation on the one hand and state intervention and public regulation on the other. One of important issues considered here is the contagious effects of crises from sector to sector, and from country to country which should be prevented by new effective regulations. Monitoring financial firms and their scale and domain of economic activities can prevent or reduce this domino effect.

Suggested Citation

  • Azizi , Ahmad, 2012. "Financial Regulation in the United Kingdom: Historical Foundations and Current Practices," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(2), pages 123-169, December.
    • Handle: RePEc:mbr:jmonec:v:6:y:2012:i:2:p:123-169
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    References listed on IDEAS

    as
    1. Adalbert Winkler, 2012. "The Financial Crisis: A Wake-up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?," Chapters, in: Masahiro Kawai & David G. Mayes & Peter Morgan (ed.), Implications of the Global Financial Crisis for Financial Reform and Regulation in Asia, chapter 7, Edward Elgar Publishing.
    2. Douglas W. Diamond & Raghuram G. Rajan, 2009. "The Credit Crisis: Conjectures about Causes and Remedies," American Economic Review, American Economic Association, vol. 99(2), pages 606-610, May.
    3. Karl Whelan, 2009. "Containing systemic risk," Open Access publications 10197/1672, School of Economics, University College Dublin.
    4. Mathias Dewatripont & Xavier Freixas & Richard Portes, 2009. "Macroeconomic Stability and Financial Regulation," Post-Print halshs-00754869, HAL.
    5. Xavier Freixas & Jean-Charles Rochet, 2008. "Microeconomics of Banking, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262062704, April.
    6. Mathias Dewatripont & Xavier Freixas, 2009. "Macroeconomic Stability and Financial Regulation: Key Issues for the G20," ULB Institutional Repository 2013/301127, ULB -- Universite Libre de Bruxelles.
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    More about this item

    Keywords

    Financial Authority; Statutory Objectives; Systematic Risk;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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