ABSTRACT
This chapter presents the evolution of the UK financial regulatory system, and focuses mainly on banking regulation and supervision. It illustrates the process of the deregulation during the 1980s, which culminate with the so-called Big Bang. The chapter deals with the creation of a single regulator, a reform of the institutional architecture of financial supervision strictly related to the dramatic transformations of the UK financial system produced by the Big Bang. It also discusses the regulatory reforms brought in after the crisis, which have been designed to introduce radical changes to both the financial landscape and the regulatory framework set up in the previous decades. The focus is on the theoretical debate about the ring fencing of retail banking, the peculiar British solution to solve the crucial issue of too-big-to-fail. The structural reforms are intended to solve the too-big-to-fail problem and to help insulate retail banking from external financial shocks, including by reducing resolvability problems arising from global interconnectedness.
