Page 12 - Banking Industry analysis (H)
P. 12
The Regulators
Post-2008 reality
Pre-2007, UK banking regulation was light-touch in
nature. In other words, the regulators only intervened
when necessary and only in limited ways. The fear was
that if the regulators adopted heavy-touch regulation
international banks would leave London and move to
countries where the regulations were less strict.
In the period after the 2007/2008 financial crisis
regulatory authorities in the U.S., EU and APAC acted to
tighten the regulations they thought would avoid a
recurrence of that financial crisis.
The UK, along with the EU and US introduced measures
designed to separate the risk-taking aspect of financial
markets from the ordinary provision of financial services,
as well as strengthen banking regulation. (5)
Regulators were faced with the need to achieve financial
stability and for ensuring that banks passed any stress
test they were faced with, as well as ensuring that
financial markets remained competitive. To this end
regulatory reform was instituted. In the U.S. this took the
following form:
