Certainly, the Credit Crunch had a profound global devastating impact on many countries when they started to experience long and deep recessions. The austerity measures imposed by the European Union and the national governments put many economies under a stress test. For example, in the United Kingdom, the legislative and regulatory review shook up the financial services sector in order to prevent a new widespread crisis. First of all, the Banking Act 2009 improved the resilience of the financial system by supporting its stability while protecting consumers and assisting banks in difficulty. This law also required the Ministry of the Treasury to indicate how it would react in the event of a future financial crisis. It was a kind of Memorandum of understanding between the Treasury Department, the Bank of England and the Financial Services Authority regarding the details of crisis management measures to be undertaken. Secondly, the financial market supervision regime underwent a transformation. Following fierce criticism of the Financial Services Authority (FSA), founded in 1997, which had failed to prevent banks from taking excessive risks, the United Kingdom launched a review of the regulatory framework led by the Conservative and Liberal parties in the government coalition. The Financial Services Act 2012 defined a new framework for financial services, dividing supervisory responsibility between two authorities with different but complementary objectives. As a result, on April 1, 2013, the Financial Services Authority (FSA) was abolished and replaced by two new and separate authorities:
Federal Act on the Swiss Financial Market Supervisory Authority of June 22, 2007 (FINMA Act). Legislative approaches strengthened the regulatory framework against money laundering procedures; for this reason, the financial markets are among the most heavily regulated sectors of the Swiss economy. Since January 1st, 2009, the Swiss Financial Market Supervisory Authority (FINMA) has embodied the “unitary regulatory model” (where there is a single regulator). Its extensive powers over banks, insurance companies, stock exchanges, securities dealers and collective investment schemes have been based on the FINMA Act and various financial market laws specific for the respective industry such as
- Banking Act for banks
- Insurance Supervision Act and Insurance Contract Act for insurances
- Legal basis for market infrastructures and markets
- Collective Investment Schemes Act for funds
- Anti-Money Laundering Act for other financial market participants
- Mortgage Bond Act for mortgage bonds.
- Statutory provisions are also detailed in ordinances issued by the Federal Council and FINMA ordinances:
- the Banking Ordinance
- the FINMA Financial Market Auditing Ordinance,
- Capital Adequacy Ordinance;
- Collective Investment Schemes Ordinance;
- Stock Exchange Ordinance;
- Insurance Oversight Ordinance;
- Mortgage Bond Ordinance.
- The circulars are further issued by the Swiss Financial Market Supervisory Authority (FINMA).