Controvercy in the evolution of the world and european financial regulation
| Author | Ph. D. Prof. Alexandru Olteanu/Ph. D. Madalina Antoaneta Radoi (Olteanu) |
| Pages | 183-189 |
Page 183
At the level of status, action and institutional construction, England played a pioneer role, when in 1997 Tony Blair's Labor Party created the Financial Services Authority, as a unique financial services regulation authority, stating also the role of the Central Bank in banking supervision (by exonerating the English Bank of this prerogative) and also the virtues, especially the defaults of the unique regulation towards the specialized regulation.
Austria, Denmark and Sweden also have unique regulation authority. Two countries - Belgium and Finland - have joint organisms for banks and investment services; other seven countries have separated institutions, which regulate the investment services. In France, the main regulation organism is the Committee for Stock Exchange Operations, the so-called COB, which shares responsibility with other two organisms: The Financial Market Council, a regulation organism, which supervises market transactions and The Banking Committee, which supervises the banking activity. Germany, which at present has special authorities for banking, investment services, insurance, expressed its wishes to adopt the unique regulation authority system. In France, too, there are talks to merge the regulation authorities, but the French authorities sustain firmly the heads regulation model, respectively for the circumspection regulations and wholesale (professional financial transactions) and the retail market regulations, on which the financial products are sold to the consumers.
Page 184
Among the European Union countries, Hungary was the first, in the first part of 2001, to proceed to the merging of the three regulation agencies within the Hungarian Financial Supervision Authority.
Outside Europe, there are regulation and supervision super authorities in Japan, South Korea, China, Hong Kong, Taiwan, and in North America - Canada.
In the USA, the regulation system, which has not changed essentially since 1934, is characterized by specialization and fragmentation. The capital markets are regulated by SEC (Security and Exchange Commission). But the other components of the financial services sector are under the authority of more regulation and supervision state bodies. The so-called Office of The Comptroller of The Currency is the one that watches over banks, but also The Federal Deposit Insurance Corporation, The Federal Reserve Board (The Central Bank) and The Bank Boards from different sates. As for the insurance companies, they are regulated and supervised by the states insurance Boards.
According Karel Lannoo (1998) from the Brussels European Centre of Political Studies (CEPS), the debate this problem should be started from the role of the central bank in insuring the stability of the financial systems and prevention of the contagious systemic crisis.
The pro argument: the practicing of the regulation and banking supervision functions by the central bank can contribute to the general financial stability insurance, inclusively in the process of bank saving.
The con argument: the monetary policy and banking supervision functions generate interest conflicts, endangering the price stability and stressing the moral risk.
Both regimes are equally illustrated in the European Union. According to Goodhaad and Schoenmaker (1995), the matter must be regarded not as an abstract theoretical exercise, but in the context of financial structure and banking particularity from each country. An analysis of the bankruptcies from the last two decades shows a more frequency in countries with a separate regime, than in the ones with mixed regimes. Their conclusion is that the banking saving operations are more likely to happen in mixed regimes.
In the banking sector there is an increase in the role of the self regulation, and there would be an over increasing agreement on the idea that the...
To continue reading
Request your trial