The United Kingdom's Response to Crisis : A Critical Examination of the New Regulatory Structure of Financial Services Supervision

The 2008 economic turmoil, which greatly affected the UK, led to the realisation that there had been a missing link in the overall structure of financial regulation. Thus, within days of coming into power, the Coalition Government announced its plans for an extensive overhaul of the regulatory structure of financial services supervision and put forward an ambitious programme for reform, hoping to restore public confidence. The UK's official response is enunciated in the Financial Services Act 2012, which came into force on the 1st of April 2013. The new legislation has resulted in the split of the Financial Services Authority (FSA) into two separate authorities, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), while a new committee, the Financial Policy Committee (FPC), has been established within the Bank of England (BoE) in order to perform macro-prudential oversight functions. This paper focuses on this very change of the regulatory architecture in the UK. It aims to critically examine its implications in order to reach a conclusion on whether the new regulatory framework is indeed what the UK needs to restore its financial stability. It will attempt to analyse whether this alteration of the regulatory framework is capable of handling future challenges posed by the ever-evolving commercial realities of the global financial markets