Page 30 - Banking Industry analysis (H)

Conclusions

The imposition of more stringent regulatory rules has, on

one hand, constrained the operational flexibility of the

banks on both sides of the Atlantic but on the other they
have strengthened the ability of the financial system to

avoid a repeat of the 2007/8 financial crisis – so far.

To this end the banks have faced an emphasis on the

quality and quantity of their capital requirement in order

to build relatively more robust banks for facing an

economic downturn.

In the U.S. the banks have regained some lost ground

since the financial crisis but even though they appear to

have reasonable upside potential they are probably still

undervalued.

In the U.K. the concern has been over industry

competition and the attainment of greater transparency,

better quality, wider client choice and switch-over

flexibility, and fairer price setting for banking services.

The Competition and Markets Authority created in

October 2013 almost immediately declared the UK
banking sector as its prime focus.