ABSTRACT
The recent history of the City of London epitomizes the difficulties of governing liberalized financial markets. In the last two decades the City has been engulfed by a series of financial scandals and crises deriving from inappropriate behaviour by City participants, coupled with the shortcomings of national regulatory structures that have failed to adjust adequately to the challenges posed by integrated financial markets. Indeed at the time of writing the City is once again embroiled in controversy, with the Financial Services Authority (FSA) and the House of Commons Treasury Select Committee investigating allegations regarding the mis-selling of split-capital investment trusts and imprudent business practices by a ‘magic circle’ of brokers, trust managers and directors. Already nineteen splitcapital ventures have ceased trading, taking the savings of over 100,000 people with them (House of Commons Treasury Select Committee 2003).2
