The Financial Services Authority: A Model of Improved Accountability?
Global Journal of Business Research, Vol. 1, No. 1, p. 83-96, 2007
7 Pages Posted: 22 May 2009 Last revised: 5 Jan 2016
There are 2 versions of this paper
The Financial Services Authority: A Model of Improved Accountability?
The Financial Services Authority: A Model of Improved Accountability?
Date Written: December 1, 2005
Abstract
Prior to the adoption of the FSA (Financial Services Authority) model, supervision of UK banks was carried out by the Bank of England. Although the Bank of England's informal involvement in bank supervision dates back to the mid nineteenth century, it was only in 1979 that it acquired formal powers to grant or refuse authorization to carry out banking business in the UK. Events such as the Secondary Banking Crisis of 1973-74 and the Banking Coordination Directive of 1977 resulted in legislative changes in the form of the Banking Act 1979. Bank failures through the following years then resulted in changes to the legislative framework. This article looks into the claim that the FSA model has improved in terms of accountability in comparison to its predecessor, the Bank of England. It considers the impact the FSA has made on the financial services sector and on certain legislation since its introduction. Through a comparison with the Bank of England, previous and present legislation, reports and other sources, an assessment is made as to whether the FSA provides more accountability. Evidence provided here supports the conclusion that the FSA is both equipped with better accountability mechanisms and executes its functions in a more accountable way than its predecessor.
Note: Paper presented at the Business and Information Conference (BAI) 2006 and the 2006 Global Conference on Business and Finance, Costa Rica. Winner of Outstanding Research Prize and Best Paper in Session Award at the 2006 Global Conference on Business and Finance, Costa Rica.
Keywords: regulator, bank, regulation, supervision, Financial Services Authority, Bank of England, accountability
Suggested Citation: Suggested Citation