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This paper aims to trace the hybridising of financial and service expertise in English local authority budget control to provide a more comprehensive understanding of the contexts that gave rise to hybridisation than do previous accountability research frameworks.

Using practice theory, this paper interprets the findings from a field study of Newcastle City Council and a review of relevant local authority regulation for England, stretching back to the 1980s.

The hybridisation of financial and service expertise has entailed major changes to the practices on which local authority management depends, fuelled by a changing societal role of local authorities. Frequently, local authorities are no longer providers of public services but enablers who purchase services and manage arms-length contracts. This paper identifies some of the ways in which three structural elements that underpin local authority management practices have evolved to give rise to novel practices.

Even though this paper’s research into changing regulatory frameworks, rules and evolving local authority financial practices is based on institutional changes in England since the 1980s, the fieldwork element which fleshes out certain implications for local authority practices has focused on Newcastle City Council. Future research could fruitfully examine these issues in other local authorities.

The hybridisation of financial and service expertise has contributed to reshaping local government beyond the rules that are put in place for regulating the sector by giving rise to new practices. Recent key developments include new service delivery arrangements, for example, through council-owned subsidiaries or third-sector organisations. It is important that, in an austerity context, new risks to “off the books” service quality is matched by new control and audit arrangements. Moreover, the professional bodies that service local government should recognise the new forms of hybridisation of finance and service expertise and ensure arrangements for the changing skill sets of those involved in service provision.

This is the first paper to analyse the emergence of hybrid financial expertise in the public sector with reference to distinct structural elements of the relevant practices.

The Financial Services Authority (FSA) is about to implement wholesale reforms of the regulatory structure of advice in the retail financial services sector. Instead of having to choose between a “tied adviser” or an “independent financial adviser” (IFA) under a “polarised” regime, consumers will have a much wider choice in terms of the range of products and scope of advice available under the new “depolarised” structure. In undertaking these reforms, the FSA aims “to improve consumer outcomes” by dealing with what it argues are market failures in the retail financial services market. This paper assesses whether the FSA’s final blueprint for financial advice can provide the improved consumer outcomes the FSA intends. It critically examines the issues of choice and quality for both products and advice, as well as considering the extent to which the reforms will create the kind of “empowered” consumers the FSA appears to expect. It argues that the reforms may not appreciably address the market failures the FSA sets out to remedy, and suggests that this is due to the likely inability of consumers to understand and take advantage of the new marketplace that is being created. This paper suggests that much greater emphasis should have been placed on financial education and extending the availability of advice before attempting such radical reforms.

The purpose of this paper is to investigate conceptualizations of Europeanization, the difficulties this creates when assessing the impacts of the European Union (EU) on member states and the influence member states have on the EU policy‐making processes. There are also problems when considering questions regarding the basis of Europeanization in terms of its relationships with globalization, governance, institutionalization, polity, politics and policy.

Different conceptualizations of Europeanization concentrate on distinct methodological positions and whether Europeanization may best be understood as “situation” or “process”. Indeed, difficulties are further exacerbated when identifying the extent that drivers for change at the EU and domestic level involved Europeanization, domestication, globalization and/or European integration. Meso theory identifies “process” and substantive theory “situation” in terms of downloading (En1), up‐loading (En2) and cross‐loading (En3). Each of these conceptualizations allow “situations” where empirical reliability could be made explicit from a particular perspective.

This paper investigates and assesses the Europeanization of UK financial services and provides a conceptualization of Europeanization as both meso (middle range) and substantive theory. By breaking down meso theory into substantive theories (up‐loading, downloading and cross‐loading) the analysis attempts to clarify the interaction between Europeanization, globalization and domestication in relation to impacts on UK financial services regulation. Following an assessment of UK financial services in general, this paper concentrates on the concept of “competent authority” and how the UK Financial Services Authority (FSA) displays attributes outlined in the directives. Through an analysis of the Third Life Assurance Directive, Second Banking Directive and FSA this paper identifies a number of issues relating to how the EU responded to sector demands and how Europeanization is actualized through domestic response.

Europeanization indicates a continual interaction or dialectic between the uniformity of the EU and the diversity of the individual member states. The process involves interaction between global, domestic and European variables with the European dimension in relation to domestic interpretation providing a mechanism whereby dominant economic global factors can be diminished or enabled.

Product intervention power is introduced under the markets in financial instruments regulation (MiFIR) and packaged retail and insurance-based investment products (PRIIPs) Regulation for all EU Member States and gives National Competent Authorities (NCAs), European Securities and Markets Authority (ESMA), and European Banking Authority (EBA) powers to monitor financial products (and services) under their supervision and to “temporarily” prohibit or restrict the marketing, distribution, or sale of certain financial instruments, or to intervene in relation to certain financial activities or practice. This extends the supervisory measures defined in MiFID II to any PRIIPs (including insurance-based investment products “IBI products”) that would not otherwise fall under the scope of MiFID II. Product intervention power is given to the NCAs, and in order to use power, it requires to take the specifics of the individual case into account and a series of conditions, criteria, and factors to fulfill. Moreover, ESMA and the EBA have a type of control function and ability to override national regulators on product. The aim of product intervention powers is to ensure strengthening of investor protection, but given the potential significant impact of this power, calls into question of possibility to delay innovation and slow down product developments on the capital market.

This paper provided an overview of supervisory measures on product intervention, that is, scope of the product intervention power, criteria, factors, and risks which have to be taken into consideration when using this regulator’s tool.

‘It must be remembered there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. For the initiator has the enmity of all who will profit by the preservation of the old institutions and merely lukewarm defenders in those who would gain by the new one.’ Machiavelli.

Regulation imposes both direct and indirect costs. Regulators have to be conscious of these costs and the finite resources available to them. The paper outlines the way in which the Financial Services Authority (FSA) has developed a system of financial supervision under which resources are directed to those issues, firms and consumers which pose the greatest risks or opportunities when judged against its statutory objectives. The application of a risk‐based approach to supervision is effectively required by a number of principles of good regulation enshrined in legislation along with a requirement to undertake cost‐benefit analysis when devising new rules. As well as informing high‐level aims, the paper shows how the risk‐based approach, through the FSA’s planning and budget process and firm specific risk assessments, affects decisions on supervisory issues and resource allocation. It also outlines how the FSA will account to government for its performance.

For the first time, a UK financial services regulator will have a statutory duty to enhance financial education in the UK. The Financial Services Authority is now beginning to set out in some detail how it will go about fulfilling that duty, and the issues it faces. As well as increasing consumer awareness of the financial industry and improving consumers' ability to identify their financial needs, the FSA aims to enable consumers to decide upon the purchase of financial products through the provision of the FSA's own information and advice — what may be referred to as a form of ‘solution education’. This will place the FSA in a relationship with the general public where the rights, responsibilities and expectations of, and upon, consumers must be made clear and accepted. The inability of the current regulatory regime to establish unequivocally what constitutes adequate or appropriate advice does not augur well.

The purpose of this paper is to highlight the activities of the FCA with respect to the incidence of money laundering and highlight regulatory gaps. The financial services sector provides a crucial infrastructure for the promotion of wealth and innovation in the UK. This attractive infrastructure also appeals to criminals looking to launder the gains of their illicit activities.

The paper analyses the UK money laundering regime, highlighting specific challenging areas. The paper investigates the role of politically exposed persons and the use of corporate structures in promoting money laundering. In this context, it also becomes crucial to investigate the role of financial institutions and the sufficiency of their governance approach in lessening the incidence of money laundering. The paper investigates secondary sources and relies on their findings. It compares these findings to the regulatory outcomes.

The paper recommends steps that can be used to lessen the incidence of money laundering in the UK. From the reports evaluated, it is clear that the Financial Conduct Authority is working towards reducing the incidence of money laundering, but this could be further strengthened with the adoption of additional enforcement tools.

The paper suggests that different approaches should be used based on firm size, the type of business and the risk that a financial services firm presents to the financial sector. A large firm will need to bear more regulatory burden compared to a smaller firm.

The paper investigates the current approach to minimising the incidence of money laundering in the UK. It suggests that the regulator can guide financial services firms to meet the regulatory objectives by relying on an approach that discerns the regulatory risks presented by different firms depending on their size.

The spectacular performance of the US financial market in recent years, the financial crises in South‐East Asia and Russia and the collapse of one of the most established merchant banks in the world are landmark events in economic history that have prompted concerns around the globe. The advent of the information age and globalisation means that the consequences of these events are felt more readily and extensively than ever before. Sustainability of financial growth and avoidance of future crises raise questions with a common denominator — good governance. With one of the principal financial centres in the world, it is trite to suggest that the need for good governance in the UK cannot be overstated. Protecting investors against abusive and fraudulent practices in the financial services industry has always assumed great importance. Since its emergence as an international financial and trading centre in the 13th century, the City of London has consistently emphasised the values of market confidence and integrity. In the Financial Services and Markets Bill, which is currently being read in Parliament, it is stated that its object is to maintain confidence in the financial markets, to promote public awareness and understanding, to secure an appropriate degree of protection for consumers through recognising the different degree of risks involved in different transactions and the different degrees of expertise and experience of different consumers, and to reduce the extent to which financial undertakings are used for the furtherance of financial crime.

The most crucial challenge facing Islamic Financial Institutions (IFIs) is the full compliance of their activities with shari'ah principles. The complexity of IFIs requires Otoritas Jasa Keuangan (OJK, Indonesian Financial Services Authority) to adopt a good shari'ah governance framework to address shari'ah risks of Islamic banking and financial institutions (IBFIs). However, the current shari'ah governance structure in Indonesia is far from ideal compared to the international best practice. This chapter proposes a new shari'ah governance framework by involving shari'ah supervisory board authority (Otoritas Dewan Pengawas Syariah) under the commissioners of OJK to oversight, regulate, and supervise the shari'ah matters for IBFIs in Indonesia. The chapter discusses the challenges in adopting this new framework. The chapter concludes that the current shortcomings of the proper shari'ah governance framework for shari'ah supervision and regulation requires a new shari'ah board authority under the commissioners of OJK who has full authority over shari'ah matters.