The crash of the financial markets in 2008 following the bankruptcy of financial services firm Lehman Brothers prompted one of the biggest government bailouts of banks and insurance companies in history. Trillions of dollars around the world were poured into scores of companies to keep them – and, in turn, the rest of the world's economies – afloat. Countries such as the UK and, in particular, Greece are still feeling the effects of the collapse and the debt they built up to fund the bailouts – and will do so for years to come.
‘Never again' was heard in almost every country affected. The over-leveraging of assets in unregulated markets had brought the world to its knees, causing mass unemployment, recession and bankruptcies. So, greater regulation of banks and other financial services companies has been the pledge of governments worldwide, including the UK coalition.
However, on this issue, it seems no government wants to be ‘first to market' with swingeing new regulations, if it causes financial services companies to leave their shores. The UK's Financial Services Act 2010 had already been passed by parliament and received royal assent on 8 April, but its changes are relatively small and the Financial Services Authority (FSA) is still consulting with companies on how it will be enforced
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Source: SC Magazine
By: Rob Buckley
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