The Impact Of Financial Services On The Uk Economy

1814 WordsDec 2, 20158 Pages
The financial services sector has a vital role to play in the UK economy. The 2007-2008 financial meltdown, also termed as the Global Financial crisis is considered by many as the worst financial crisis since the Great Depression of the 1930s. The crisis which began with a run on a major high-street bank s, Bear Stearns and Lehman Brothers and resulted in part-nationalisation of two of the largest banks in the world, and left the UK economy vulnerable was purportedly caused by the failure of financial institutions to manage themselves judiciously, and of regulators to discern the risks that were building up across the system as a whole. The argument whether and how to regulate the financial services industry in UK seems to have been marred by tints of abuses and scandals. The Banking Act 1979(BA’79) was perhaps the first UK Act to put banking regulation on a statutory footing, moving away from the previous derelict self-regulatory approach. The crisis in the Johnson Matthey Bank in 1984 which exposed the deficiencies in the 1979 Act could be considered as the impetus for the advent of Banking Act 1987 and the departure of the former. The 1987 Act increased the Bank of England’s(BoE) supervisory role by imposing duty on BoE to supervise the banks. The 1991 Bank of Credit and Commerce International the 1995 Barings Bank collapse, the 1970’s Secondary Banking crisis etc. are some of the instances which indicate the deficiencies of both the Banking Acts and the BoE’s
Open Document