In the years preceding the financial crisis, Congress came under pressure to emulate the UK Financial Services Authority’s “light-touch” regime amid fears that Wall Street would relocate more activity to the UK. Now there is a growing desire to deal with regulatory gaps by crossborder regulation.
Carolyn Maloney, a Democratic representative from New York, said there was a “disturbing pattern in the last few years of London literally becoming the center of financial trading disasters ."
London has railed against the raft of recent regulations from the European Union and the UK government as it fights to maintain its reputation as a global financial hub.
Regulators in the UK, however, have scrapped the light-touch approach, favoring more intrusive supervision. They are deeply concerned about the pattern of overseas firms getting into trouble in London. JPMorgan’s London-based trading unit was part of its UK branch, regulated by US officials.
The FSA sees clear flaws in the current regulatory set up for the London arms of giant US and Swiss banks, which run large parts of their UK businesses as “branches” rather than locally authorized “subsidiaries”, which would be more tightly supervised by the UK.Page 2 of 3 | Prev Page | Next Page