An Analysis of the Proposed New Regulatory Structure in the UK

17/07/2012 Marcus Killick OBE


The new regulatory structure in the UK has generated mixed opinions among regulators and industry observers. While some see it as a necessary change to a “failed experiment,” others believe it to be comparable to rearranging deckchairs on the Titanic. This paper examines the proposed changes outlined in the HM Treasury consultation and evaluates whether this new approach alone can prevent regulatory failures witnessed in recent years. The focus is on the Twin Peaks model, which replaces the Financial Services Authority (FSA) with two new regulators.

The paper questions whether this model is the most effective way forward, if it will deliver the anticipated benefits, and the potential risks it may bring. It also discusses whether a separate prudential regulator should be placed within the Bank of England or function independently.

Ultimately, the paper argues that the proposed changes may offer little additional benefit and could introduce their own risks, potentially weakening consumer protection and the UK’s influence in Europe during a period of significant regulatory change. The speed at which the changes are being implemented also raises concerns about potential errors and omissions that could undermine the long-term stability of the new structure.

Read the article: A new series or a new chimera?

(Article first published in The Company Lawyer [Thomson Reuters], 2012.)

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