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In recent years there have been calls for reforms to the institutional structure of bank regulation in Nigeria. It is argued these reforms are needed in order to strengthen the banking sector so that it can continue to play a key role in boosting economic development in Nigeria. To this end, this article analyses different arrangements for the institutional structure of bank regulation and maintains that bank supervision should be retained within the central bank. It further advocates a total restructuring of the institutional edifice of financial regulation with the view that the Twin-Peaks approach to financial regulation is the most advantageous institutional structure for financial sector regulation in Nigeria. There are merits and demerits with each of the different institutional structures but the strengths of Twin Peaks make it the optimal institutional structure for financial regulation in Nigeria.

The Financial Services Act 2012 ushered in a new era in the regulation of UK financial services. The institutional structure of financial regulation was over-hauled, and the responsibility for the protecting users (consumers) of financial services was transferred from the Financial Services Authority FSA to a new regulator, the Financial Conduct Authority (FCA). At the same time, the FCA has also taken over the responsibility for the regulation of consumer credit from the Office of Fair Trading (OFT). It is therefore an opportune moment to reflect on how the authors think of the Bconsumer^ of financial services and therefore how best to protect this consumer. The 2012 Act has made Bensuring that the relevant markets function well^ the core objective of the FCA, with Bconsumer protection^ one of three operational objectives (s6(1B)). This Special Issue aims to explore the implications of the Act, and the constitution of the new FCA, for the delivery of consumer protection for users of retail financial services. Key questions include how we conceptualize, and identify, Bvulnerable^ consumers (or vulnerable groups of consumers), how we understand and protect consumers across a Bdifferentiated^ population, and how we conceive of, design, and target financial services regulation to support better outcomes for

In the wake of the Global Financial Crisis (GFC), banks in the UK and other parts of the world suffered significant financial losses. One of the findings of official inquiries into the GFC and its effects in the UK is that shareholders were remarkably docile during the height of the market euphoria. Shareholders made very little effort to constrain banks from taking more risky business strategies. In addition, shareholders have been slow to bring legal actions against directors of loss-making banks and financial institutions. This is despite the fact that company law provides a wide range of mechanisms for shareholder activism, such as the powers of shareholders to elect and dismiss directors, (through the General Meeting), and to bring legal actions against directors for breach of statutory and fiduciary duties. This suggests that company law is, in practice, something rather different from what it is claimed to be in theory. This chapter explores some of the reasons for this divergence and looks at ways of bridging this gap between company law in theory and in practice. In so doing it examines the use of human rights claims as a last resort where the more traditional company law principles have proved to be inadequate with regards to fostering shareholder activism.

One of the key components of regulatory regimes is the approach that the regulator adopts toward the supervision of the regulated. Regulators are therefore always looking for supervisory approaches that can increase compliance, by the regulated, with the requirements of the regulatory regime. Meta-regulation is one approach that has gained popularity in recent years. This article looks closely at the issues that arise when the regulated are closely involved in the regulatory process as a result of the use of meta-regulation. The article argues that the use of meta-regulation in the supervision of regulated firms is not unproblematic. The article uses the failures in UK financial regulation in the run-up to the global financial crisis as case studies to illustrate some of the problems that can arise with the use of meta-regulation, and analyzes some of the proposals for reforming UK financial regulation so as to overcome these problems.

With contributions from across the disciplines of law, history, finance, and economics, Complexity and Crisis in the Financial System offers a truly interdisciplinary study of the relationship(s) between crises and complexity in the US and UK financial markets. Taken together, the contributions in this volume not only challenge many often taken-for-granted ideas about the nature of financial crises, but also broaden our understanding of the long-term causes (and consequences) of the global financial crisis of 2007–2008.

Recently, Early Warning Signals (EWS) have been developed to predict tipping points in Earth Systems. This discussion highlights the potential to apply EWS to human social and economic systems, which may also undergo similar critical transitions. Social tipping points are particularly difficult to predict, however, and the current formulation of EWS, based on a physical system analogy, may be insufficient. As an alternative set of EWS for social systems, we join with other authors encouraging a focus on heterogeneity, connectivity through social networks and individual thresholds to change.

The rise of the information age has led to what some have referred to as the network society. The rise to prominence of the network society is likely to change the nature of corporate organisation and activity. It is also likely to have huge implications for how we think of corporations- ideas that the corporation is a ‘nexus of contracts’ or a means of reducing ‘transaction costs’ will no longer accurately describe the true nature of the modern ‘network enterprise’ which the corporation has become. Arguably, the idea of trust can be more closely associated with this new form of network enterprise. It is also likely that many of the previously dominant ideas in corporate governance, such as agency theory and shareholder primacy, will no longer be adequate for articulating how best to govern the modern network enterprise. This is largely because they conflict with a wider trust-oriented approach. Such an approach facilitates greater stakeholder engagement in corporate governance. This article suggests that, going forward, trust and embedded stakeholder ideas will play a greater role in the organisation and governance of corporations.

The Global Financial Crisis (GFC) threatened to bring world financial markets to a halt. It is now coming to light that in the run-up to, and at the height of, the GFC, investment banks and other participants in the financial markets acted unethically as well as imprudently. This article takes a closer look at this unethical behaviour and the way in which it constitutes a failure of trust. The article defines trust and outlines why it is important in the regulation of financial markets. It then looks at three examples of breakdowns or failures of trust in the run-up to the financial crisis. The article concludes by arguing that trust is important in commercial relationships at both the intra-firm level (the relations between the different constituents of the firm) and the inter-firm level (the relations between the firm and other firms).

The Global Financial Crisis of 2007-2009 wreaked havoc in world financial markets and almost brought down the global financial system. One of the consequences of the crisis is the large number of borrowers currently struggling to repay loans that were advanced to them largely as a result of irresponsible lending.In the run-up to the crisis a number of factors, such as flawed monetary policy, excessive liquidity and the misuse of financial innovations led to a deterioration of risk controls and standards for the extension of credit, particularly with regard to sub-prime mortgage loans. Financial innovations such as securitisation, structured finance and credit derivatives provided incentives for irresponsible lending, since they allowed loan originators to transfer the risks associated with their loan portfolios to investors in asset-backed securities throughout the global financial markets. The lowering of standards for the extension of credit led to asset price bubbles in several countries, with the most significant of these being house price bubbles in the US and the UK. This was largely fuelled by sub-prime mortgages advanced to borrowers who could only afford to keep up their mortgage repayments if house prices continued rising, thus allowing them to refinance at lower interest rates in the future. When the house price bubbles burst and house prices stopped rising, these borrowers started defaulting in huge numbers and this caused widespread panic in the global financial markets and almost brought down the global financial system.In the aftermath of the crisis, much of the discussion on how to prevent, or reduce the effects of, future financial crises, has centred on dealing with the risks to the financial system rather than the protection of vulnerable borrowers and users of financial products. The focus has been on improving the prudential regulation of the banks through such measures as increased capital adequacy requirements and the question of how to tackle the problem of large, systemically important banks that are considered too big to fail. In comparison, very little attention has been paid to addressing the consumer protection issues which were thrown up by the mis-selling of sub-prime mortgages to borrowers who could not afford them. This is despite the fact that the default by these borrowers was one of the key tipping points in the unfolding of the financial crisis.This paper examines the proliferation of sub-standard retail financial products such as sub-prime mortgages and payday loans. It analyses the factors that contributed to the innovation and diffusion of these products. It looks at some of the patterns in the development and marketing of retail financial products for the less affluent members of society. It also explores the effects that the proliferation of sub-standard retail financial products have on the economy, society, communities and the individual users (consumers) of such products. In doing so, it looks at the economic, political, legal and ethical issues that arise with the diffusion of such financial products. It is only through a good understanding of these products and their effects that we can have a meaningful debate on how best to deal with the consequences of the proliferation of such products.

PurposeThe purpose of this paper is to examine the approaches to consumer protection in UK financial services before and after the global financial crisis.Design/methodology/approachThis paper reviews the literature on behavioural economics and psychology, and uses it as the basis for a critique of the UK's approach to the supervision of financial services firms and the protection of their consumers.FindingsNon‐interventionist approaches to consumer protection, which are based on the traditional theories of the law and economics movement, have failed. As a result, there is now a shift in thinking towards more interventionist approaches.Research limitations/implicationsBy understanding the likely impact of the regulatory reforms the academic research community can assist the regulator to understand the best way to ensure desirable outcomes for users (consumers) of financial services.Originality/valueThe moves to reform UK financial regulation after the crisis have only recently got under way and a lot of the reforms have not been widely debated or written on.

The recent Global Financial Crisis (GFC) threatened to bring world financial markets to a halt. It is now coming to light that in the run-up to, and at the height of, the GFC, investment banks and other participants in the financial markets acted unethically as well as imprudently. This article takes a closer look at this unethical behaviour and the way in which it constitutes a failure of trust. The article defines trust and outlines why it is important in the regulation of financial markets. It then looks at three examples of breakdowns or failures of trust in the run-up to the financial crisis. The article concludes by arguing that trust is important in commercial relationships at both the intra-firm level (the relations between the different constituents of the firm) and the inter-firm level (the relations between the firm and other firms).

Purpose – The global financial crisis of 2007–2009 has highlighted the need for reform of financial regulation in several jurisdictions across the globe, including the United Kingdom and the United States. This chapter argues that the reforms need to be comprehensive and will therefore have to cover several aspects of financial regulation. Design/methodology/approach – The chapter critically examines some of the areas where reforms are most needed. This involves consideration of the merits and demerits of multi-functional or universal banking. It also involves consideration of the systemic and other problems that arise as a result of the increasingly international nature of banking and other financial services. Moreover, it examines the need for regulators to understand and keep pace with financial innovation. Furthermore, it involves discussion on the need to improve corporate governance and remuneration policies in banks and other financial services providers as well as the need for adequate arrangements for dealing with bank insolvencies and collapses. Findings – Market fundamentalism and over-reliance on the alleged self-correcting powers of the market have led to excessive deregulation and liberalisation in world financial markets. Financial regulatory reforms will therefore have to be substantial and comprehensive to properly address the problems caused by excessive financial liberalisation. Originality/value – The chapter examines significant issues that academics, regulators and policy makers should consider when devising or implementing reforms designed to prevent, or reduce the impact of, financial crises in the future.