Effective Ways to Reform the UK Banking System
finance and investment | Effective Ways To Reform The UK Banking System | Analysis and Discussion | | Final draft Prepared by:Bruce(ZHANG) | 9/1/2012 |
Topic: Which of the suggested reforms to the UK banking system would be the most effective at reducing the risk of future crises in the banking sector? |
Background:
The United Kingdom has the most developed financial and banking systems in the world. London has been entitled as the financial centre in the UK, Furthermore it is the primary international financial centre in the world. London is still playing an essential role in the global banking scheme with its dominance unshakable in the finance trading world. UK banking has been known as a well-structured banking system, and it is well-regarded in the world banking industry. In addition, the government policy has consistently aligned with its economy system. In the year of 2008, things have been changed quite dramatically by a fast-spread economic downturn shock wave. Two America Real Estate cooperation, Fannie Mae and Freddie Mac, were bankrupts and this can be seen as the “direct cause” to this long lasting banking crises.
After the outbreak of the international financial crises, the British government has acquired 100% of the shares of Northern Rock bank, 83% stake of Royal Bank of Scotland and 41% of the shares of Lloyds bank, and through the Special Liquidity plans to provide emergency financial supports for large banks. During this crisis, it explodes many issues that the government, investors and bankers should be responsible for. Problems have been raised by many people about how to reduce the risk of future crises in banking system: firstly, we need to know that the purpose of bank is to protect and enhance the stability of the monetary system. Generally speaking, a stable and organised financial system is a key ingredient for a healthy and successful economy. Additionally, both taxpayers and consumers should be protected by the
Topic: Which of the suggested reforms to the UK banking system would be the most effective at reducing the risk of future crises in the banking sector? |
Background:
The United Kingdom has the most developed financial and banking systems in the world. London has been entitled as the financial centre in the UK, Furthermore it is the primary international financial centre in the world. London is still playing an essential role in the global banking scheme with its dominance unshakable in the finance trading world. UK banking has been known as a well-structured banking system, and it is well-regarded in the world banking industry. In addition, the government policy has consistently aligned with its economy system. In the year of 2008, things have been changed quite dramatically by a fast-spread economic downturn shock wave. Two America Real Estate cooperation, Fannie Mae and Freddie Mac, were bankrupts and this can be seen as the “direct cause” to this long lasting banking crises.
After the outbreak of the international financial crises, the British government has acquired 100% of the shares of Northern Rock bank, 83% stake of Royal Bank of Scotland and 41% of the shares of Lloyds bank, and through the Special Liquidity plans to provide emergency financial supports for large banks. During this crisis, it explodes many issues that the government, investors and bankers should be responsible for. Problems have been raised by many people about how to reduce the risk of future crises in banking system: firstly, we need to know that the purpose of bank is to protect and enhance the stability of the monetary system. Generally speaking, a stable and organised financial system is a key ingredient for a healthy and successful economy. Additionally, both taxpayers and consumers should be protected by the
References: [5]http://www.bankersonline.com/tools/99INVPOL.pdf Accessed January 6, 2000 “INVESTMENT POLICY” James Baker --------------------------------------------