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Western EuropeJanuary 16 2023

Edinburgh reforms: a dent in the UK’s gold-plated armour?

In the race for ‘turbocharged’ economic growth, is the UK putting its reputation for gold-plated financial services rules, which kept risky behaviours in check, on the line? Anita Hawser reports.
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Edinburgh reforms: a dent in the UK’s gold-plated armour?Image: Getty Images

Casino and banking are terms that are rarely used in the same breath these days. In fact, you could argue that banking in the UK has become a tad boring compared with the heady days of 2008, when the term “casino trading” was used to describe the business models of those UK banks that used retail customer deposits to fund excessive risk-taking and expansion within their trading operations. 

Since the global financial crisis, chief risk officers within banks have been kept busy implementing a swathe of new regulations – Basel III, the Markets in Financial Instruments Directive (MiFID) II, packaged retail and insurance-based investment products, the list goes on – designed to keep casino bankers in check and protect consumers and investors. But the UK went a lot further than most financial markets. In 2011, the Vickers Commission prescribed ringfencing – the legal separation of “core retail banking services from activities such as investment and international banking” – as the best antidote to discouraging banks from thinking they were “too big to fail”.

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Anita Hawser is the Europe editor at The Banker. For the past 20 years, Anita has worked as a freelance journalist for a range of banking, finance and tech titles covering topics such as cybersecurity, financial crime, cryptocurrencies, payments, trade and supply chain finance. Before joining The Banker, Anita was Europe editor at Global Finance.
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