Banking and Finance Law Essay Example | Topics and Well Written Essays - 2000 words

Banking and Finance Law - Essay Example Because of the high profit margins and the resultant stiff competition, the financial services sector has been marred with a lot of confusions and complex regulatory and operational issues. In the United Kingdom, like in many other developed and developing countries, the financial services sector is quite a sophisticated one, making many a people to develop defensive attitudes towards it. Fortunately, the UK government has established several consumer-oriented policies, strategies, laws and agencies to help in regulating the financial services sector. These regulatory agencies and laws not only provide free and independent complaint services to the public and financial firms but also amicably solve grievances among financial institutions and their consumers (Francis, 2001). It has not been enough to merely enact financial laws; agencies such as the defunct FSA and the Office of Fair Trading (OFT) were established to ensure that consumer-protection laws are adhered to by the financial institutions, more so regarding the protection of consumer savings and investments by authorized organisations (Xydias, 2007). This paper explores the structure and the methods of financial services regulation currently used in the United Kingdom and the extent to which these methods and the structure have been successful in achieving their objectives. Financial Services Regulation in the UK For financial accountability, reliability and the credibility of financial services, countries have established various organisations and implemented a number of methods by which the players in the financial and banking sectors are regulated (Andenas & Chiu, 2011). In the United Kingdom, the financial and banking sectors are regulated by various methods for several reasons. That is, there are certain objectives for which the UK government has established financial regulation structures, organisations and policies. Financial regulations refer to the guidelines and supervisory activities to which financial and banking institutions and individual professionals are subjected in the execution of their operations (Federal Trade Commission, 2007). These regulations give guidelines, restrictions, aims/objectives and integrity or accountability requirements and expectations for financial institutions and professionals as well (Davies & Green, 2008). In many a country, both governmental and non-governmental agencies are involved in the regulation and control of financial and banking sectors. Nonetheless, the objectives of these regulations and the concerned organisations are quite similar. In the UK for instance, financial regulations seek to enforce all the laws applicable to financial operations in a country. Second, financial regulations help in the maintaining of the public’s and investors’ confidence in UK’s financial system besides reducing the financial institutions’ violation of financial laws. The other activities checked by financial regulation mechanisms are market manipulation activities such as insider trading and money laundering (Gonzalo, 2010). Importantly, financial regulation protects clients through processes such as the investigation of customer/public complaints. In addition to the above objectives, financial regulation helps in ensuring that only legal and competent investors are