The COVID-19 pandemic has created a global scene that is producing some incredible reactions. One of which is the level of state-backed intervention that is occurring in the UK and US, with the respective Conservative and Republican governments announcing record financial packages. However, as part of that intervention, we are starting to see elements of state intervention in private business that is not being received well by the market. In this post, we shall examine the Bank of England’s decision, as part of its role as the British regulatory framework’s top supervisor, to apply pressure to banks to cancel dividends. For HSBC, and its structure, this has proven to be a particular issue. It was reported recently that a number of the UK’s largest banks had received pressure from the Prudential Regulation Authority, the regulatory arm of the Bank of England, to halt their dividends ‘ after they were warned against paying out billions of pounds to shareholders during the coronavi...

Here in Financial Regulation Matters we have covered the concept of ‘capture’ from a number of different angles, including the audit , banking , and tobacco industries through to the concept of ‘ public private partnerships ’. Additionally, we have also looked at issues relating to money laundering , and economic crime more generally. It is for those reasons that the recent news that the British Government have put in place a number of plans to tackle the systemic issue of economic crime within the country – with London being consistently rated as one of the world’s leading economic crime ‘ hotspots ’ – is worth examining. Yet, rather than this being the headline, there is a glaring issue that the media have been quick to focus upon. The Independent ’s headline neatly sums up the story: “ Government criticised for giving banks key oversight role over fraud and money laundering ”. So, in this post we shall examine these developments and analyse the theory of ‘capture’ a little mor...

This short post reacts to the news today that banks and building societies are being enlisted by the British Government to check the immigration status of millions of people and take the appropriate action – essentially putting banks on the front-line in the push to reduce the levels of people living in this country without the appropriate leave to do so. The obvious question to be raised by this move is whether the banking system is the appropriate vehicle to meet this objective, and what may be the connotations for it doing so. It was declared in the Autumn ( via the Immigration Act 2016 ) that banks and building societies would be given a list by the anti-fraud organisation Cifas that contained the details of people who are officially liable to be removed or deported from the U.K., or who have absconded from immigration control , with the Home Office stating that the new system would be ‘ fair but firm ’. The design of the new system would be that banks (and building societie...