Abstract
Several recent developments — notably, the breakdown of traditional distinctions between different types of financial activity, the globalisation of financial markets, and increasing emphasis on systemic stability as a regulatory objective — have prompted policy makers to search for an ‘optimum’ regulatory structure that is adapted to the new market environment. The UK has undertaken the most radical overhaul of its regulatory arrangements by locating regulatory responsibility for the entire UK financial services industry within a single allembracing regulatory agency — the Financial Services Authority (FSA). With some countries, notably Japan, moving in the same direction and others (eg Germany, Ireland and Austria) planning to do so, attention is increasingly focused on the merits of the UK approach. This paper examines the case for a single financial regulator in the context of the UK's recent regulatory restructuring.1 The first section reviews the objectives, targets and techniques of regulation within a segmented financial services industry; the second section describes the new market environment; the third section analyses the implications for the structure of regulation; the fourth section describes and assesses the new UK regulatory regime; and the final section provides a summary and conclusion.
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