Banking Supervision in a Context of Deregulation

In the prevalence of neoliberal policies, deregulation of the banking and financial systems takes place. The regulatory structure set up in the interwar years, which followed systemic crises, is partly dismantled, at first through administrative measures, then through legislation, and the difference between banks and other financial intermediaries becomes blurred, with the purpose of levelling the playing field. More room is given to financial innovation, to the benefit of efficiency, and to the cost of instability. Meaningfully, in the United Kingdom these developments bring to entrusting supervision of the whole banking and financial sectors to a new entity, separated from the central bank.