Reinforcing the responsibilities of financial regulators:Are we still barking up the wrong tree?

In this short essay we explore the regulatory criticisms raised within the “Changing Banking for Good” report (House of Commons, House of Lords 2013). These criticisms suggested UK financial regulators have been risk averse, loath to enforce regulation and often intervene in markets after a considerable delays and problems have growth in their magnitude and costs. The practice of regulation was also criticised as requiring excessive and overly complex rules fostering a culture of box ticking. Perhaps most tellingly a compact between government and the banking sector was reported through which regulators moderate their actions to ensure financial stability. The “Changing Banking for Good” report also proposed multiple remedies. These included harsher punishments, more enforcement activity, and multiple initiatives to ensure individuals accept responsibility for their decisions. Many of these proposals have now been translated into financial regulation, often altering how regulation is undertaken.