Financial Regulation Changes in the UK and Australia

Financial Regulatory Changes in the UK and Beyond

• The UK abolished the Financial Services Authority in 2013, recognizing its failure to address issues from the global financial crisis.
• The Financial Conduct Authority was established in its place to enhance regulatory oversight.
• In 2016, the UK implemented a Senior Manager's Regime that mandated deposit-taking firms and insurers to clearly define and allocate responsibilities among senior managers.

Global Responses to Financial Accountability

• Australia introduced the Banking Executive Accountability Regime in 2017, similarly focusing on senior management accountability.
• Hong Kong and Singapore also adopted measures to promote accountability among senior managers.
• Other countries, including Ireland, are developing comparable accountability frameworks.

Financial Settlements Post-Crisis

• Following the global financial crisis, financial institutions faced significant penalties for misconduct related to mortgage-backed securities.
• Goldman Sachs paid $5.1 billion in 2016 to settle mis-selling claims.
• Bank of America incurred $17 billion in fines, JPMorgan $13 billion, and Citigroup $7 billion due to similar issues.
• Royal Bank of Scotland faced fines exceeding $7 billion from US regulators.
• Deutsche Bank settled for $7.2 billion in 2017, while UBS paid $1.4 billion in penalties.

Banker's Oath and Its Implications

• A Banker's Oath was introduced, stressing ethical responsibility and prioritizing customer interests.
• The oath emphasizes compliance with laws, confidentiality, and the importance of trust in the financial sector.
• Research conducted in 2016 revealed that the Banker's Oath had little effect on improving confidence in the financial industry.
• Some bank employees viewed the oath as outdated, emphasizing the need for tangible accountability in addition to ethical commitments.

Critical Perspectives on Ethics in Banking

• John R Boatright highlighted the limitations of relying solely on ethical approaches for banking conduct.
• There is a recognized necessity for both ethical grounding and external verification to ensure responsible banking practices.

Explore the financial regulation changes that took place in the UK, including the abolition of the Financial Services Authority and the introduction of the Financial Conduct Authority and the Senior Manager's Regime. Learn about the regulatory developments in Australia as well.