Resumen de The Financial Services (Banking Reform) Act 2013: Smart Regulatory Regime?
The Financial Services (Banking Reform) Act 2013 includes the government’s reform of the banking industry regarding ‘ring-fencing’ and the ‘electrification’ of the ring-fence. The ring-fencing provisions in the Act are based on Sir John Vickers’ Report and the recommendations from the Parliamentary Commission on Banking Standards (PCBS). The PCBS argument was that the envisaged ‘ring-fence’ regulation in the Bill, based on Sir John Vickers’ report, fell short of expectations, and would be easily breached by unscrupulous bankers; therefore it recommended that to strengthen it further, the ring-fence should be fortified with more punitive regulatory measures, dubbed as ‘electrifying the ring-fence’. This ‘electrification’ seems to be an innovative idea to solve the problems envisaged; however, it is argued that this idea is not without theoretical problems of its own. Also, it is suggested that to solve behavioural and structural problems within banking institutions, the Act could have benefited from a regulatory regime based on the concept of ‘whistle-blowers’ and economic incentives, also found in section 922 of the Dodd-Frank Wall Street Reform and the Consumer Protection Act (Dodd-Frank Act).
