Banking Reform Struggles On

Abstract

The Financial Services (Banking Reform) Act 2013 was passed as part of an ongoing process to improve the stability of the United Kingdom’s banking system. It does not sit in isolation but is part of a process that has involved the creation of the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA), and the adoption of the European Union’s (EU’s) Capital Requirements Directive IV which brings the Basel III banking regulations into EU law. The background for the statute’s content was Sir John Vickers’ Report1 into banking reform, published in September 2011, which led in turn to the June 2012 White Paper.2 At the same time, the Parliamentary Commission on Banking Standards was examining accountability and corporate governance in the context of the London Interbank Offered Rate scandal as well as the issues of banking stability and competition.3 However, the content and aims of the statute sit oddly with the causes and processes of the most recent banking crisis and had it existed at the time it is unlikely to have made much difference. This article will examine the aims and content of the Act and consider what its consequences are likely to be.