The Importance Of The Financial Service Sector

1996 Words8 Pages
The financial service sector plays a crucial role in supporting UK’s businesses which in turn helps to boost its economy. By means of financial services the financial reforms augment economic growth thereby helping to construct a competitive and robust financial system exempted from taxpayer support and coordinated at an international level. The financial services sector consists of firms like banking, insurance, organised and informal markets, asset management together with a wide array of supporting professional services. In the UK the Financial Services Sector relies upon the systems of supervision and regulation put into operation by the government which promises to deliver the good quality service as well as security. The…show more content…
It has been done by creating a new financial policy committee within the bank with powers given to monitor and respond to the risks. The Prudential Regulatory Authority (PRA) was set up for practical supervision and regulation of banks, credit unions, building societies, insurance companies and investment firms. The PRA is a part of the Bank of England and it focus is to monitor the harm firms can cause to the UK’s stable economy. The PRA works together with the Financial conduct authority (FCA). The FCA is not a part of the Bank of England; it is responsible to promote effective competition and to make sure that the relevant markets function properly. It regulates the asset managers and independent financial advisors and helps to minimize market abuse and provide consumers with the best deal from the financial firms. The FCA has also inherited the Financial Service act (FSA) authority which includes issuance and trading of securities. It consists of establishing market code of conduct and imposing civil and criminal penalties and supervising trading platforms. With the new powers given to the FCA such as banning financial products, publishing details of misleading financial advancements and information about implementing disciplinary actions, will help FCA to act more quickly and effectively when there arises a problem. In June 2013 the FCA was however criticised by the Parliamentary Commission for Banking Standards in a 571 page report called
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