After the Financial Crisis
Edited by Sylvester Eijffinger and Donato Masciandaro
Chapter 16: Regulating the Regulators: The Changing Face of Financial Supervision Architectures Before and After the Financial Crisis
Donato Masciandaro and Marc Quintyn Introduction In June 1998 the responsibility for banking supervision in the United Kingdom (UK) was transferred from the Bank of England to the newly established Financial Services Authority (FSA), which was charged with supervising all segments of the financial system. For the first time a large industrialized country – as well as one of the main international financial centers – had decided to assign the task of supervising the entire financial system to a single authority, other than the central bank. After that symbolic date, the number of unified supervisory agencies has grown rapidly. In Europe, this trend has seemed rather strong. True, the UK was not the first one to unify its supervisory structure. The Scandinavian countries (Norway (1986), Iceland and Denmark (1988) and Sweden (1991)) had preceded the UK. But it is no exaggeration to state that the establishment of the FSA really opened the gate to widespread reforms worldwide. In addition to the UK, three ‘old’ European Union member states – Austria (2002), Belgium (2004), and Germany (2002) – have since assigned the task of supervising the entire financial system to a single authority other than the central bank. In Ireland (2003) and the Czech and Slovak Republics (2006) the supervisory responsibilities were concentrated in the hands of the central bank. 454 Regulating the Regulators 455 Five countries involved in the EU enlargement process – Estonia (1999), Latvia (1998), Malta (2002), Hungary (2000) and Poland (2006) – have also reformed their structures, concentrating all powers in a single...
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