Task – 4500 Word Essay
1. How can the moral hazard that is said to be attached to deposit guarantee schemes be reduced?
2. Is greater involvement of Central Banks in the regulatory process desirable?
3. ‘[The FSA] will adopt a flexible and differentiated risk-based approach to setting standards and to supervision, reflecting the nature of the business activities concerned, the extent of risk within particular firms and markets, the quality of the firms’ management controls and relative sophistication of the consumers involved…’
Critically analyse the use of risk based regulation within the financial sector
4. ‘The aims of these reforms are clear. First, since future financial crises rarely repeat the pattern of the past, we must focus on making banks more resilient to shocks. Second, we must make our Banks more resolvable so that, should they fail, it is in a manner that does not threaten the Provision of vital services essential to the real economy.’ HM Treasury Banking Reform: delivering Stability and supporting a sustainable economy (CM 8356 June 2012)
In light of the above statement, discuss the viability of the UK responses to the GFC.