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 be check offd in this study whether the limits of a bankers commercial enterprise elicit ever be laid down by the law or whether a bankers descent line should in accompaniment be left undefined. This will be done in lightsome(a) of the late(a) financial crisis so that a determination can be made as to whether banking law has proven effective in regulating bankers or whether unnecessary risk ar still cosmos taken. In doing so, the powers and responsibilities of the Financial Services Authority (FSA) will be examined in dedicate to decide whether the activities currently universe undertaken by the FSA argon sufficient enough to regulate the financial market.Literature ReviewThe main objectives of a bank is to provide financial services to individuals and organisations by allowing money to be either borrowed or deposited whilst at the same time acting as a means for credit to be created. Nevertheless, given up the involvedness of the modern banking mi litary control, it seems as though a lack of regulation exists which is especially evident in light of the recent financial crisis. This is because banks appear to have taken extortionate risks without any(prenominal) intervention which is highly pestiferous to both the economy and consumers. It is quite difficult to determine what a bankers business should consist of, however, which is why with child(p) difficulty remains when trying to assess how they ought to be regulated. 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 unify Dominions Trust Ltd v Kirkwood 1966 1 QB 783 a bankers business still remains ill-defined.It is unclear whether a bankers business should be laid down by the law, however, since the activities undertaken by banks ar often to wide-ranging to classify. This would impose overly much restriction on banks and certain activities would be prevented from being undertaken Woods v Martins Bank (1959) 1 QB 55. Despite this, it is weighty that some form of restriction is in place so that unnecessary risks atomic number 18 avoided. This was highlighted by Benston and Kaufman (1996, p. 1) when they pointed out that to protect our money, banks should not be allowed to take great risks that might cause them to fail. Therefore, some restrictions are needed so that banks are not free to do as they wish as this would be extremely 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 phone number (FMSA) 2000 to regulate the financial services industry more(prenominal) effectively, given the recent financial crisis, it is questionable only if how efficient the F SA is.However, as noted by the FSA themselves as a risk-based regulator, our approach 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 lasting relevant in nowadayss society (House of Commons treasury Committee, 2009, p. 4). In view of this, it has thus been noted by Awrey that perhaps most glaringly, conventional financial guess failed to adequately account for the complexity of modern financial markets and the nature and pace of financial innovation. This signifies how the FSA have been unable to keep up-to-date with the advances that are continuously being made within society and that go on regulatory procedures are thereby necessitate if the banking industry is to be restored to an acceptable 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 indus try so that banks do not abuse their powers and responsibilities.Proposed methodological analysisIn acquiring the relevant information for this study, various academic opinion, case law and legal theory will be analysed. These will be acquired by accessing text books, journal articles, governmental reports and online legal entropybases. unoriginal explore 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 way of undertaking the research, which is applicable for this assignment given the difficulty in obtaining primary 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 but which contains descriptive data. summary of the WorkOverview of the Banking Industry A brief overview of the banking industry will be provided here in order to determine 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 too complex to be defined. pattern 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 utmost 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 supernumerary 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 ability to regulate the banking industry so that a vigorous system is in place. If the activities of bankers were not was in needed so that any problems that are likely (FSA, 2009, p. 5). Hence, it is live that the risks taken by bankers are severely limited since much ambiguity would ensue if restraints were not being imposed upon the financial sector and as noted by Johnston (1960, p. 347 the difficulty is increased by the fact that banking, like some 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 confines 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 t he 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 approach so that future financial crisis can be prevented. It has thereby been said that the FSA should investigate how financial services firms manage their Information security system 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 crimes similar to those that caused the economic crisis will be more easily 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 Regulation of Modern Financial Markets, Harvard Business Law, Oxford Legal Studies Research Paper No 49/2011, Online Available 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 wickedness Risks in Information Security, Financial Crime celestial sphere Report, 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/ annual/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.F SA., (2012) What we Do Regulatory Approach, Financial Services Authority, Online Available http//www.fsa.gov.uk/pages/about/what/approach/index.shtml 13 FEBRUARY, 2013.House of Commons Treasury Committee. (2009) Banking Crisis Dealing with the Failure of UK Banks, Seventh Report of Session 2009-09, Report Together with Formal 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.