Alison Lui - Financial Stability and Prudential Regulation: A Comparative Approach to the Uk, Us, Canada, Australia and Germany

In this exciting new monograph Dr Alison Lui has provided a very timely and contemporary account of the relationship between central banks and financial services regulation. The monograph is extremely well written and illustrates excellent levels of analysis and research. It provides a very unique comparison and comparative commentary between several major economic centres including the United Kingdom and the United States of America. I unhesitatingly recommend this book to students, practitioners, policy makers who have an interest in this area. Dr Lui must be congratulated for producing an excellent piece of work that offers a refreshing and innovative review on a subject that continues to be of significant importance.

Professor Nicholas Ryder, University of the West of England

Financial Stability and Prudential Regulation

Financial stability is one of the key tenets of a central banks functions. Since the financial crisis of 20079, an area of hot debate is the extent to which central banks should be involved with prudential regulation, especially micro-prudential regulation and supervision.

This book examines the macro- and micro-prudential regulatory frameworks and systems of the UK, Australia, the US, Canada and Germany. Drawing on the regulator frameworks of these regions, it book examines the central banks roles of crisis management and prudential regulation. Alison Lui compares the institutional structure of the new twin peaks model in the UK to the Australian model, the multi-regulatory US model (with some elements of the twin-peaks model) and the single, consolidated regulatory Canadian and German models. The European Banking Union and the impact of the Single Supervisory Regime are also examined.

The book also discusses the extent to which the central bank in these countries, as well as the European Central Bank (ECB), is involved with financial stability. It demonstrates how the Bank of England, ECB and Federal Reserve have gained regulatory and supervisory powers since the global financial crisis. Despite the increase of powers, there is an argument for permitting central banks to have micro-prudential supervisory powers for financial-stability reasons. As a multi-regional, comparative study on the importance and effectiveness of prudential regulation, this book will be of great use and interest to students and researchers in the law of financial regulation, economics and banking.

Alison Lui is a Senior Lecturer in Law at Liverpool John Moores University.

Routledge Research in Finance and Banking Law

For a full list of titles in this series, please visit www.routledge.com/products/SCLW08

Forthcoming:

Competition Law and Financial Services

David Harrison

Institutional Structure of Financial Regulation

Theories and International Experiences

Robin Hui Huang and Dirk Schoenmaker

Microfinance and Financial Inclusion

The challenge of regulating alternative forms of finance
Eugenia Macchiavello

Banking and Society

Mapping Financial Regulation and Social Justice for the 21st Century Gary Wilson and Sarah Wilson

Available:

European Prudential Banking Regulation and Supervision

The Legal Dimension
Larisa Dragomir

International Secured Transactions Law

Facilitation of Credit and International Conventions and Instruments
Orkun Akseli

The Legal and Regulatory Aspects of Islamic Banking

A comparative look at the United Kingdom and Malaysia
Abdul Karim Aldohni

Financial Stability and Prudential Regulation

A comparative approach to the UK, US, Canada, Australia and Germany

Alison Lui

First published 2017

by Routledge

2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge

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Routledge is an imprint of the Taylor & Francis Group, an informa business

2017 Alison Lui

The right of Alison Lui to be identified as author of this work has been asserted by her in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

Names: Lui, Alison, author.

Title: Financial stability and prudential regulation : a comparative approach to the UK, US, Canada, Australia and Germany / Alison Lui.

Description: Abingdon, Oxon ; New York, NY : Routledge, 2016. | Series: Routledge research in finance and banking law | Includes bibliographical references and index.

Identifiers: LCCN 2016013477| ISBN 9781138899971 (hbk) | ISBN 9781315707563 (ebk)

Subjects: LCSH: Capital market--Law and legislation | Financial institutions--Law and legislation/Classification: LCC K1114 .L85 2016 | DDC 332.1/1--dc23 LC record available at http://lccn.loc.gov/2016013477

ISBN: 978-1-138-89997-1 (hbk)

ISBN: 978-1-315-70756-3 (ebk)

Typeset in Galliard

by Sunrise Setting Ltd, Brixham, UK

To My Father and Mother

Contents

Since the global financial crisis, there has been a torrent of national and international legislation aimed at improving the regulation of banks, so as to prevent another crisis: and there has also been much academic commentary on the efficacy (or lack of efficacy) of these measures.

This monograph supplies a gap in the current scholarship, by providing an insightful and measured comparative analysis, by reference to the themes of financial stability, prudential regulation and the increased regulatory role of central banks.

In this work, Alison Lui examines how different jurisdictions have struck the balance between financial innovation and financial stability. She considers the prudential regulatory regimes of the UK, US, Canada, Australia and Germany and discusses how the institutional structures of financial regulation affect the quality of the implementation of financial-stability policies.

In particular, she discusses the impact of the Basel III Accord (particularly the provisions concerning counter-cyclical capital buffers, micro-prudential regulation and supervision) and the impact of the DoddFrank Wall Street Reform and Consumer Protection Act 2010 on the US financial regulatory architecture.

Alison Lui also reviews the strengths and weaknesses of the policies adopted by central banks during the global financial crisis and analyses how the Bank of England has carried out its mandate to maintain financial stability since the global financial crisis, before looking to the future.

Financial stability remains a key item on the agenda of central banks. Global threats the uncertainty surrounding interest rates, emerging market risks and cyber risks heighten the problem.