Has the law proven effective regulating the banking industry or are the limits of a bankers business too complex to be laid down by the law.

IntroductionIt allow for be rigid in this study whether the limits of a bankers chore faeces ever be laid blue by the law or whether a bankers business should in detail be left undefined. This go away be make in light of the recent fiscal crisis so that a closing can be made as to whether banking law has proven legal in regulating bankers or whether unnecessary risk argon cool off being taken. In doing so, the powers and responsibilities of the pecuniary work Authority (FSA) impart be examined in order to decide whether the activities currently being beneathtaken by the FSA are sufficient enough to regulate the monetary market.Literature ReviewThe briny objectives of a bank is to provide financial run to individuals and organisations by allowing funds to be either borrowed or deposited whilst at the same time per stratuming as a means for credit to be created. Nevertheless, given the complexness of the modern banking business, it seems as though a lack of regulatio n exists which is peculiarly evident in light of the recent financial crisis. This is because banks appear to fuck off taken extortionate risks without any intervention which is highly detrimental to both(prenominal) the economy and consumers. It is quite difficult to determine what a bankers business should represent of, however, which is why great difficulty remains when trying to assess how they ought to be modulate. And, although some attempt to define a bankers business has been made by the courts Commissioners of the State Savings Bank of Victoria v Permwan & Anor (1914) 19 CLR 45 and United Dominions Trust Ltd v Kirkwood 1966 1 QB 783 a bankers business hush up remains ill-defined.It is unclear whether a bankers business should be laid down by the law, however, since the activities undertaken by banks are often to wide-ranging to classify. This would impose as well oftentimes restriction on banks and certain activities would be prevented from being undertaken woodland v Martins Bank (1959) 1 QB 55. Despite this, it is big that some form of restriction is in place so that unnecessary risks are avoided. This was highlighted by Benston and Kaufman (1996, p. 1) when they pointed out that to protect our money, banks should non be allowed to take great risks that strength cause them to fail. Therefore, some restrictions are needed so that banks are non free to do as they wish as this would be passing damaging to the economy. The financial Services Authority (FSA) was in fact introduced in order to regulate the activities of bankers, yet it remains arguable whether this has been successfully achieved. This is because, although the FSA has been provided with statutory powers under the Financial Services and Markets Act (FMSA) 2000 to regulate the financial function industry more effectively, given the recent financial crisis, it is questionable scarcely how efficient the FSA is.However, as noted by the FSA themselves as a risk-based regulator, ou r progression is based on a clear statement of the realistic aims and limits of regulation. not all agree with this, however, and instead it has been argued that the FSA are no longer pertinent in todays guild (House of Commons Treasury Committee, 2009, p. 4). In view of this, it has thus been noted by Awrey that perhaps most glaringly, customary financial theory failed to adequately account for the complexity of modern financial markets and the nature and pace of financial innovation. This signifies how the FSA be possessed of been unable to keep streetwise with the advances that are continuously being made within society and that besides regulatory procedures are thereby required if the banking industry is to be restored to an pleasant state. Modern financial markets thereby appear to complex for the FSA and so it is important that more stringent regulatory practices are instilled upon the banking industry so that banks do not abuse their powers and responsibilities.Propos ed MethodologyIn acquiring the relevant breeding for this study, various academic opinion, case law and legal theory will be analysed. These will be acquired by accessing text books, journal articles, political reports and online legal databases. Secondary inquiry will be the main forma of research used for this assignment so that existing data can be collected and analysed in order to reach a conclusion. This will be a more cost effective and time saving course of under fetching the research, which is applicable for this assignment given the difficulty in obtaining elemental research from large organisations such as the FSA. Quantitative and qualitative research methods will be used so that information can be gathered that is in numerical form, whilst also gathering information that is not in numerical form unless which contains descriptive data.Outline of the WorkOverview of the Banking exertion A brief overview of the banking industry will be provided here in order to det ermine the main objectives of bankers and the effects in which their activities can have on the economy.Powers and Responsibilities of Bankers It will be considered here whether a bankers business can be defined by the law or whether the activities are as well complex to be defined.Regulation of the Banking Industry An evaluation as to whether the banking industry ought to be regulated more efficiently will be made by looking at the existing regulatory procedures and considering whether they have so furthest been effective or whether more needs to be done in order to prevent further financial crisis from arising.Financial Services Authoritys Powers and Responsibilities The powers and responsibilities of the FSA will be considered in order to determine whether additional powers ought to be conferred upon the FSA or whether modern banking is too complex to enable the FSA to regulate financial activities. Thus, it will be shown that whilst banking activities do remain complex, the FSA should still be provided with the efficiency to regulate the banking industry so that a robust system is in place. If the activities of bankers were not was in needed so that any problems that are probable (FSA, 2009, p. 5). Hence, it is vital that the risks taken by bankers are severely limited since much ambiguity would ensue if restraints were not being imposed upon the financial empyrean and as noted by Johnston (1960, p. 347 the difficulty is increased by the fact that banking, like other forms of business, continues to develop and expand its activities to meet its competitors and provide wider services for the public with the result that any attempt to squeeze the concept into the verge of a definition may prove successful today but inadequate tomorrow.Are the Powers and Responsibilities of the FSA acceptable in todays societyHere, it will be discussed whether the powers and responsibilities of the FSA are acceptable in todays society where modern banking is more complex than ever. Hence, it will be shown that the FSA has come under much scrutiny since the financial crisis was first instigated, yet rather than taking a step back, the FSA need to take a more interventionist show up so that future financial crisis can be prevented. It has thereby been state that the FSA should investigate how financial services firms manage their Information Security Risks how these risks are evolving the risks they pose to our objectives and the role industry and government bodies play in assisting regulated firms to address these Information Security Risks (FSA, 2004, P. 3). If a more interventionist approach is undertaken by the FSA, financial evils similar to those that caused the economic crisis will be more advantageously identified and therefore dealt with appropriately. Strong financial crime deterrent messages1 will also be sent out by the FSA and financial crime will inevitably be reduced.ReferencesAwrey, D. (2011) Complexity, Innovation and the Regulati on of Modern Financial Markets, Harvard Business Law, Oxford Legal Studies Research Paper No 49/2011, Online acquirable http//papers.ssrn.com/sol3/papers.cfm?abstract_id=1916649 14 February, 2013.Benston, G. and Kaufman, G., (1996) Why Regulate Banks, Res, Online Available http//www.res.org.uk/society/mediabriefings/pdfs/1996/July/benston.pdf 13 February 2013.FSA. (2004). Countering Financial Crime Risks in Information Security, Financial Crime Sector advertise, Online Available www.fsa.gov.uk/pubs/other/fcrime_sector.pdf 14 February, 2013.FSA., Delivering a Reduction of Financial Crime (2011) FSA Annual Report 2011/12, Online Available www.fsa.gov.uk/pubs/yearly/ar11-12/section5.pdf 14 February, 2013.FSA. (2009) The Turner Review A Regulatory Response to the Global Banking Crisis, Financial Services Authority, Online Available http//www.fsa.gov.uk/pubs/other/turner_review.pdf 14 February, 2013.FSA., (2012) What we Do Regulatory Approach, Financial Services Authority, Online Avail able http//www.fsa.gov.uk/pages/about/what/approach/index.shtml 13 FEBRUARY, 2013.House of Commons Treasury Committee. (2009) Banking Crisis relations with the Failure of UK Banks, Seventh Report of Session 2009-09, Report Together with ceremonious Minutes, HC 416, Online Available http//www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/416/416.pdf 14 February, 2013.Johnston, C. C. (1960) Judicial Comment on the Concept of Banking Business. 2 Osgoode Hall 347.1 FSA., Delivering a Reduction of Financial Crime (2011) FSA Annual Report 2011/12, fsa.gov.uk/pubs/annual/ar11-12/section5.pdf Accessed 20 August, 2012.