Discuss the United Kingdom's Financial Services Authority (FSA)

Question

What will be an ideal response?

Answer 1

In the United Kingdom, the Financial Services Authority (FSA) regulates the banking, securities, commodities futures, and insurance industries. The FSA is an independent, nongovernment body whose board of directors is nominally appointed by the Crown. In contrast, in the United States, banks are regulated by the Federal Reserve Board, the Comptroller of the Currency, and state bank regulators; securities firms are regulated by the Securities and Exchange Commission (SEC), state securities commissions, and the National Association of Securities Dealers; commodities futures are regulated by the Commodities Futures Trading Commission; and insurance is regulated by state insurance commissions.
The FSA's self-avowed goals are to: a) maintain confidence in the British financial system; b) promote public understanding of that system; c) secure the right degree of protection for customers, and e) help reduce financial crime. Like its American counterparts, the FSA oversees transactions, demands ethical and legal conduct from firms, and sets standards. Unlike the American system, which utilizes government funding, the FSA charges all firms it regulates annual licensing fees and thus is privately funded. This idea is to allow the FSA to act independently by removing all subjectivity, such as governmental wishes. The concentration of powers in the FSA theoretically allows it to better regulate the country's banking and trading exchanges because it does not have to coordinate with other bodies that may have diverging goals and interests.