Ojo, Marianne (2005): The External Auditor's Role in Bank Regulation and Supervision : Helping the Regulator Avoid Regulatory Capture.
This is the latest version of this item.
Download (405kB) | Preview
The incoming Labour administration in 1997 caused a stir when it gave the Bank of England additional monetary policy powers but removed the Bank’s powers to regulate banking. Up till 1997, banking regulation had been the function of the Bank of England while other areas of financial services had been regulated by bodies such as: The Securities and Investment Board (for investment business) and the Department of Trade and Industry (for insurance). Section 21 of the Bank of England Act 1998 effectively transferred banking supervision to the Financial Services Authority (then known as the Securities and Investments Board). This paper amongst other objectives, aims to explore how the Financial Services Authority ( the FSA) as a regulator, could benefit from the expertise of the external auditor as a middleman, to avoid regulatory capture. As an efficient system of accountability would also help prevent regulatory capture, the issue of accountability will also be discussed. A consideration of developments leading to the adoption of a single regulator in the UK, will illustrate how the type of regulator can contribute to knowledge of how the external auditor can assist the regulator. Furthermore, not only does this paper consider how the introduction of the FSA has improved transparency and accountability within the banking regulatory and supervisory system, but also the claim that the external auditor could further employ his expertise to help the regulator avoid regulatory capture.
|Item Type:||MPRA Paper|
|Original Title:||The External Auditor's Role in Bank Regulation and Supervision : Helping the Regulator Avoid Regulatory Capture.|
|Keywords:||single; regulator; regulatory; capture; external; auditor; banking; supervision|
|Subjects:||K - Law and Economics > K2 - Regulation and Business Law|
|Depositing User:||Dr Marianne Ojo|
|Date Deposited:||02. Jan 2007|
|Last Modified:||18. Jul 2013 11:16|
Ayres I and Braithwaite J (1992) Responsive Regulation : Transcending the Deregulation Debate ( New York : Oxford Union Press ) 115 Beattie V, .Fearnley S, Brandt R (2001) 'Behind closed doors : What company audit is really about' Institute of Chartered Accountants in England and Wales
Beattie V., Fearnley S. August 2002 'Auditor Independence and Non audit services : A Literature Review' see <http://www.icaew.co.uk/publicassets/00/00/03/64/0000036464.PDF>
Board of Banking Supervision Report (July 1995) Barings Bank Collapse, Minutes of Evidence Briault C (1999) The Rationale for a Single National Services Regulator (Financial Services Authority London Occasional Paper)
Caparo v Dickman (1990) 1 All ER 568-608 Carosio G ‘Italy, Europe and Financial Regulation’ Fazio A (2002)‘The reorganisation of the Italian bank system’ ( Joint session of the sixth committee of the Italian Senate and Chamber of Deputies 10 Oct 2002 ) Ferran E (2003)‘Examining the UK’s Experience in Adopting the Single Financial Regulator Model’ 28 Brooklyn Journal of International Law Financial Reporting Council Annual Report 2004/2005 Financial Reporting Council Annual report 2005/2006 Filipova T (2003) ‘ Concept of Integrated Financial Supervision and Regulation of Financial Conglomerates : The Case of Germany and the UK’ Fleming A and Mwenda K (2001)‘International developments in the organizational structure of financial services supervision’ (paper presented at a seminar hosted by the World Bank Financial Sector FSA Annual Report (2004/05) Chief Executive’s Report Godfrey J and Langfield-Smith I 1995 'Regulatory Capture in the Globalisation of Accounting Standards' WPG 04-08 Hadjiemmanuil C (1995) “Banking Regulation and the Bank of England ” Lloyds of London Press Laffont J and Tirole J (1991) ' The politics of Government Decision Making : A Theory of Regulatory Capture' 106 Quarterly Journal of Economics pp 1089-1127. Llewellyn D (1999) The Economic Rationale For Financial Regulation Financial Services Authority London Occasional Paper Llewellyn D (2001) ‘The Creation of a Single Financial Regulatory Agency in Estonia : The Global Context’(paper presented at a conference on the challenges of unified supervision in the new millenium July 2001) Lomnicka E (1999)‘Reforming UK Financial Services Regulation : The Creation of a Single Regulator’ Journal of Business Law Mogg JF 1995 ' Internal Controls : The EC Response to BCCI' Internal Controls in Banking Edited by Ray Kinsella Oak Tree Press Dublin Moore M (2005)‘Hedge Funds face tougher times, says Greenspan’ Daily Telegraph Mwenda and Mvula (2003) ‘ A Framework for unified financial services supervision’ Journal of International Banking Regulation Posner R (1974) 'Theories of economic regulation' 5 Bell Journal of Economics and Management Science pp 335-358 Research Papers 1999 Houses of Parliament; Research Paper 99/68; Financial Services and Markets Bill [Bill 121 of 1998-99] Review of the Regulatory Regime of the Accountancy Profession, Report to the Secretary of State for Trade and Industry, see www.dti.gov.uk/cld/post_enron.htm. Singh D 2003 'The role of third parties in banking regulation and supervision' Journal of International Banking Regulation Volume 4 No 3
SAS 120 Revised : Consideration of Law and Regulations
See SAS 620 Revised : The Auditor's Right and Duty to report to regulators in the financial sector
Stigler G (1971) ' The theory of economic regulation' 2 Bell Journal of Economics and Management Science Tafara E (2004)‘Remarks Before the World Economic Forum Industry Agenda Meeting Regarding Finance’ ( speech by director, office of international affairs US Securities and Exchange Commission, New York City NY, Sept 21 2004) The Financial Services Consumer Panel An Independent voice for consumers of financial services (Annual Report 2004/2005) The Role of External Auditors in Financial Services Supervision, 2000 Report by PricewaterhouseCoopers Financial Services Regulatory Consulting Group Treasury Committee Report No 1 1996 Barings Bank and International Regulation Treasury Committee Volume 1 Session 1996-1997 First Report Barings Bank and International Regulation Vieten HR (1997) Banking Regulation in Britain and Germany compared : capital ratios, external audit and internal controls 140
Available Versions of this Item
The External Auditor's Role in Bank Regulation and Supervision : Helping the Regulator Avoid Regulatory Capture. (deposited 09. Oct 2006)
- The External Auditor's Role in Bank Regulation and Supervision : Helping the Regulator Avoid Regulatory Capture. (deposited 02. Jan 2007) [Currently Displayed]