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Article
Publication date: 1 January 1995

DAVID T. LLEWELLYN

Given the potential costs of regulation, the objectives and rationale of regulation need to be made clear. The paper argues that the ultimate rationale of regulation is…

Abstract

Given the potential costs of regulation, the objectives and rationale of regulation need to be made clear. The paper argues that the ultimate rationale of regulation is not paternalistic but, in order to correct for market imperfections and failures, to offer consumers the benefits of economies of scale that can be derived from collective monitoring by a specialist regulator and to offer an assurance of minimum standards, regulation should be designed to correct for market imperfections and failures that potentially compromise consumer welfare. It is also argued that, when efficiently constructed, regulation and supervision reinforce competition and the efficiency of market mechanisms rather than impede them and that the ‘accountancy cost’ of regulation is an entirely misleading measure of the costs of regulation.

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Journal of Financial Regulation and Compliance, vol. 3 no. 1
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 April 2001

David T. Llewellyn

The purpose of this paper is to set the proposed new capital adequacy arrangements in the wider context of what is termed a regulatory regime. The central theme is that…

Abstract

The purpose of this paper is to set the proposed new capital adequacy arrangements in the wider context of what is termed a regulatory regime. The central theme is that the components of the regulatory regime need to be combined in an overall regulatory strategy, and that while all the components are necessary, none alone is sufficient. The optimum mix of the components of the regime changes over time as market conditions and compliance culture change. It is argued that, in current conditions, there needs to be a shift within the regime in five dimensions. The proposed new Accord is discussed in terms of this regulatory regime paradigm. The Accord is a welcome move in the direction of a broader approach to bank regulation and a recognition that other mechanisms (notably an enhanced role for market discipline) are needed.

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Journal of Financial Regulation and Compliance, vol. 9 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 December 2005

David T. Llewellyn

The purpose of the paper is to offer an analytical framework for the Treating Customers Fairly initiative of the Financial Services Authority. The TCF agenda is set in the…

Abstract

The purpose of the paper is to offer an analytical framework for the Treating Customers Fairly initiative of the Financial Services Authority. The TCF agenda is set in the context of theory of consumer behaviour. The central theme is that retail financial transactions are fundamentally different from most other economic transactions made by retail consumers and to an extent that means the consumer needs to have Trust and Confidence in the products purchased and the suppliers of financial products and services. A distinction is made between different types of products and also between the degree of need for Trust and the extent to which the consumer actually does have Trust and Confidence when making decisions. The inculcation of Trust and Confidence needs to become a central strategic issue in financial firms and can be addressed by initiatives of collective self regulation rather than more prescriptive regulation.

Details

Journal of Financial Regulation and Compliance, vol. 13 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 10 July 2017

David T. Llewellyn, Maria J. Nieto, Thomas F. Huertas and Charles Enoch

Abstract

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Journal of Financial Regulation and Compliance, vol. 25 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 March 1998

David T. Llewellyn

In recent years major banking and financial crises have emerged in several countries. Banking systems seem to have become more crisis‐prone. Banks in many countries have…

Abstract

In recent years major banking and financial crises have emerged in several countries. Banking systems seem to have become more crisis‐prone. Banks in many countries have very high levels of non‐performing loans, there has been a major destruction of bank capital, banks have failed, and massive support operations have been necessary. They have involved substantial costs: in some cases the cost has exceeded 10 per cent of GNP (eg in Spain, Venezuela, Bulgaria, Mexico, Argentina, Hungary).

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Journal of Financial Regulation and Compliance, vol. 6 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 April 1998

David T Llewellyn

The FSA will become the most powerful financial regulator in the world as a single agency responsible for the regulation and supervision of the full range of financial…

Abstract

The FSA will become the most powerful financial regulator in the world as a single agency responsible for the regulation and supervision of the full range of financial services. While questions of institutional structure raise important issues, they are of second‐order importance compared with the general approach, style and intensity of regulation and supervision that regulators apply. The objective of the paper is to outline some general principles to guide the regulation and supervision of banks so as to maximise the probability of objectives being achieved, while at the same time minimising the potential costs.

Details

Journal of Financial Regulation and Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 April 1998

David T Llewellyn

The Bill gives the FSA substantial discretion in the way its powers can be exercised. A key issue for a financial regulator relates to the selection it makes from the…

Abstract

The Bill gives the FSA substantial discretion in the way its powers can be exercised. A key issue for a financial regulator relates to the selection it makes from the range of instruments available and the way they are combined in an overall regulatory strategy so as to achieve objectives effectively and efficiently. The object of this paper is to review a policy document the FSA has issued. This document indicates how the FSA plans to evolve its approach to regulation. One of the particular challenges for the FSA will be to get the balance right between harmonisation and differentiation.

Details

Journal of Financial Regulation and Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 22 February 2008

David T. Llewellyn

The purpose of this paper is to offer an initial assessment of the Northern Rock (NR) crisis.

Abstract

Purpose

The purpose of this paper is to offer an initial assessment of the Northern Rock (NR) crisis.

Design/methodology/approach

The paper describes the context of financial market turmoil and the multi‐dimensional aspects of the crisis.

Findings

The central finding of this paper is that the NR episode is a multi‐dimensional problem and reflects a complex set of inter‐related problems.

Originality/value

The paper brings together some of the strands of the analysis and addresses several lessons that can be learned.

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Journal of Financial Regulation and Compliance, vol. 16 no. 1
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 August 1995

Leigh Drake and David T. Llewellyn

Analyses alternative forms of pricing and pricing strategies ofbank payments services and reports the results of an internationalsurvey of pricing practices in 11…

Abstract

Analyses alternative forms of pricing and pricing strategies of bank payments services and reports the results of an international survey of pricing practices in 11 countries. Makes a distinction between implicit and explicit pricing and, in the context of British banks′ policy of implicit pricing for personal accounts maintained in credit, compares the pricing practice of British banks and those in other countries. Considers how each compares with optimal strategies indicated by the theoretical analysis. Finds that British banks are alone in not making explicit charges for payments services which is sub‐optimal: there is no incentive for customers to economize on their use of current account; this induces behaviour which raises the costs of banks, and there is no incentive for consumers to use cheaper forms of payment media. Implies a structure of cross‐subsidies which is unlikely to be sustainable in a more competitive market environment.

Details

International Journal of Bank Marketing, vol. 13 no. 5
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 1 January 2004

ANDREW ADAMS and SETH ARMITAGE

The mutualisation of two English third division football clubs in 2001 and the creation of a large number of supporters' trusts make it timely to consider whether there is…

Abstract

The mutualisation of two English third division football clubs in 2001 and the creation of a large number of supporters' trusts make it timely to consider whether there is a case for mutualisation of football clubs. This paper assesses whether mutuality would be of economic benefit for clubs, drawing heavily on the experience of mutuals in the financial sector. Our conclusions are mixed. The economic case rests on the distinctive feature of customer loyalty to a club, presuming this to be much stronger than loyalty to a financial institution. However, club members in a mutual must expect to be called upon to provide financial support.

Details

Studies in Economics and Finance, vol. 22 no. 1
Type: Research Article
ISSN: 1086-7376

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