Are there problems in the US banking system?
After news that the Financial Services Authority has fined a third Morgan Stanley dealer for alleged trading violations there are serious concerns about regulatory and monitoring systems within many of the world's largest banking companies. While the headlines today and tomorrow will centre on Morgan Stanley and the new fine issued by the FSA there are concerns that the worldwide financial system is literally falling apart.
While this is the third time that Morgan Stanley has been fined for dealer activity in a relatively short period of time, they are not the only company to come under the spotlight of the FSA. The UK regulator appears to be coming down very hard on alleged banking irregularities and trading violations, looking to send a signal to the City of London financial markets as a whole. Whether these ongoing concerns which have been raised by the regulator affect any future government backed rescue packages remains to be seen although it does not reflect too well when taxpayers are footing the bill.
Over the last few weeks it has become apparent that the UK and worldwide banking system needs to be reviewed and regulators need to co-operate with each other on a regular basis. Historically we have seen many home-grown regulators retain potentially useful information in house and refuse to assist their overseas counterparts.
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