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Regulation of Banks and Financial Institutions


Investment management / Mutual Funds

Hedge Funds

The Financial Times reported on 30 March 2005 that traditional fund managers are reviewing their relationships with City Brokers amid concerns that hedge funds are being given priority treatment because of the high trading commissions they generate.

Market Timing Scandal

There have been a number of high profile scandals in the US,recently, about the role of Investment Managers and how they have given preference to share trading deals to preferred clients (who placed other business with the Investment Manager) at the expense of small investors/ pension funds etc. Industry pundits have blamed this outcome on the preoccupation of the Investment Manager with selling his services for a profit( salesmanship) as opposed to looking after the interests of clients (stewardship).

These pictures depict this issue and explain some of the background.

Basel II

The Financial Times reported on 15 November 2005 that delays in the implementation of the Basel II Accord ( due in 2008) in the US would, in the view of large European Banks, erode the benefits which the new rules would give(improved risk management by using models based on past performance to help set the amount of capital banks are required to hold by regulators). In the US regulators and politicians are worried about the complexity of the regulations and the potential negative competitive impact on 7000 smaller US banks.

This suite of 5 graphics depicts the G10, The Basel Banking Supervisory Committee, The three "Pillars" of Basel II.

picture thumbnail of Basel II image


UK- Financial Services Authority (FSA)

In January 2004 the FSA published its annual Financial Risk Outlook. This document identifies the areas of concern to the Regulator and indicates the areas of focus for the Regulator in the coming year.

It was reported in the Financial Times on 12 October that the FSA had dropped plans to lower the standards of information required of listed companies after support for the existing rules from investor institutions. The rules for debt issues will be reduced. The FSA intends to bring in a new set of listing principles designed to ensure that issuers act in accordance with the spirit as well as the letter of the rules.

See Paul Cummins's article, dated 12 October, and article dated 29 October on this topic.

Other graphics depict the FSA in metaphorical terms.

picture thumbnail of FSA


US- Securities Exchange Commission (SEC)

The SEC is the financial regulator for the US Financial Services Industry. These graphics depict SEC in metaphorical terms.

US Attorney General Eliot Spitzer on 14 October sued the nation's leading insurance brokerage firm, alleging that it steered unsuspecting clients to insurers with whom it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts.The actions against the brokerage firm, Marsh & McLennan Companies, stem from a widening investigation of fraud and anti-competitive practices in the insurance industry. Evidence revealed in the lawsuit also implicates other major insurance carriers.

It was reported in the Financial Times on 7 December 2004 that the SEC has indicated that it is will to drop the requirement for foreign companies to reconcile their financial statements to US Accounting rules.

On 22 February 2005 the Financial Times reported that the SEC in the US is set to allow fund managersto continue to place business with Brokers who provide independent research to the managers through a process called "Soft Dollar Commission". The regulator is keen to allow funding of equity research outside the big Wall Street securities firms.

See Paul Cummins's article, dated 22 October, on Eliot Spitzers attack on the insurance industry. There will shortly be a new graphic on the website ,depicting Eliot Spitzer reprimanding Marsh & McLennan.

picture thumbnail of  the SEC warning the insurance sector in the US



The Irish Financial Services Regulatory Authority (IFSRA) is the financial regulator for the Irish Financial Services Industry. It has recently, expressed concern about the lack of transparency to investors of certain investment products called "Tracker Bonds".These graphics identify the areas of concern of IFSRA as outlined in their published consultation paper in March 2004.


picture thumbnail of Ireland's regulator IFSRA admonishing credit unions



*Penrose Report on Equitable Life

Lord Penrose published his report into the conduct of Equitable Life in early March 2004 . This report will have a major impact on the regulation of the insurance sector going forward. This suite of graphics identifies the issues in this report.

* The EU Commission is proposing new measures to throw open the EU's market for retail financial services. An outline of the proposals discussed by the Financial Times on 22 April 2005 cites term- life insurance as an example where EU-wide standards could apply. The proposals, which are still subject to revision, will be presented tby Chatlie McCreevy, The EU Internal Market Commissioner,in May.

* Regulation of the Actuarial Profession

In the light of criticisms of the profession in the Penrose Report an Actuarial Standards Board is to be set up to oversee the setting of professional and technical standards. The majority will be members independent of the profession.



picture thumbnail of Actuarial profession image