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Capital Markets Law Journal 2009 4(1):50-62; doi:10.1093/cmlj/kmn035
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© The Author (2009). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Is it time to highlight the limits of risk-based financial regulation?

Joanna Gray*
*Professor, Newcastle Law School, Newcastle University.

The first 150 words of the full text of this article appear below.


Key points

  • The run on Northern Rock that took place in September 2007 has raised some serious questions about the ‘fitness for purpose’ of the institutions and techniques of financial regulation in the United Kingdom.
  • One defining feature of the Financial Services Authority (FSA) in the development since 1998 of its role as a unitary and integrated financial regulator has been its pioneering of ‘risk-based’ and ‘principles-based’ regulation.
  • The way in which risk-based supervision was applied to Northern Rock and the way in which risk-based regulation worked within it have been the subject of much public scrutiny after the run on the bank and some elements of that scrutiny are highlighted here.
  • In the light of the real distinctions between risk and uncertainty that have been drawn by scholars and indeed by the FSA itself in defence of its actions around Northern Rock, this article raises questions about the wisdom . . . [Full Text of this Article]

 

   1. Introduction
 

   2. Northern Rock and the performance of risk-based regulation
 
Northern Rock's own account of adequacy of its risk management
Applicable ARROW Framework to FSA supervision of Northern Rockand its account of its discharge of its supervision
Keeping faith with risk-based regulation

   3. Concluding comments
 

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