FSA to release paper on banking regulation
The Financial Services Authority (FSA) will this week release its much awaited paper regarding the future regulation of the UK banking industry. This comes just hours after a spat between the UK government and the Bank of England regarding the potential splitting of UK banks into risky and less risky operations.
The highlight of the forthcoming paper will be the focus on "Banks deemed too big to fail" and the potential impact they could have on the UK economy and the worldwide money markets in the future. It will be interesting to see how both the UK government and the Bank of England respond to the paper when it is released and indeed whether the FSA will have the opportunity to push through these proposals.
There is no doubt that "Banks deemed too big to fail" are nowhere near beyond the potential damage caused by future recessions and future credit crunches. It is the attitude that these banks are too big to fail which many believe is at the root of the ongoing problem and a major cause of the credit crunch which originally began in the US. While many of the recommendations have already been leaked to the press it will be interesting to see the general comments in the FSA paper.
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