The Banking Act 2009: A historical piece of legislation or a relic of our time; only history can tell?

Chambers, Clare (2010). The Banking Act 2009: A historical piece of legislation or a relic of our time; only history can tell? International Journal of Liability and Scientific Enquiry, 3(1/2) pp. 72–85.



Our future is unwritten, this cannot be doubted. However, could it be that our banking history could hold the answers that could save us from the economic crisis that is ravaging our nation and societies future? The new Banking Act 2009 as well as many academics and politicians are calling for a return to a simplistic banking system. But more than that, our banking history tells us of the historic financial crises and the respective regulatory changes. Surely lessons can be learnt from the retrospective regulation to ensure that future crises’ can be minimised.

We have for years been in a golden age of available credit and economic boom, today we are experiencing the economic bust. This cyclical evolution of the economic system can not be changed by regulation but what can be done is to ensure that the extremes of the cycle are not reached as they have been in the current economic crisis.

Banks will fail. They will succeed. Banks are not homogenous, they are large, small, and have differing ethoses. Yet what regulators can do is to look at the past, chart the mistakes made and to lessen the effects on the future by trying to minimise those highs and lows of the cycle. The question here is whether the Banking Act 2009 will achieve this, or whether the Act was a knee jerk reaction to the economic crisis.
The paper will briefly explore the current economic crisis to set the scene for a discussion of the Banking Act 2009. Finally the paper will explore the possible consequences of the Act.

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