The UK Financial Services Authority (FSA) has been split in two, as the UK embraces what is called “twin-peaks” model of financial regulation, where separate entities for prudential supervision, and the oversight of consumer protection and market conduct are created. The prudential oversight wing moved inside the Bank of England.
But in its final form, the European banking union will be made up of three pillars, the final one being a common deposit guarantee scheme. Let’s make one thing clear – a single deposit guarantee arrangement is certainly the logical next step in terms of financial integration, but it is altogether premature at the present time because it would disequilibriate liability and control.