Wed 27th Sep, 2006
The Beginning of the End for The Bank of England
Ten years ago the Bank of England turned its head as Barings, the City of London’s oldest merchant bank collapsed. This ended the security and trust Britain’s banks had in their regulator. The myth was shattered. The Bank of England was ‘not’ in the business of protecting them from the real world.
The following years have shocked the industry: TSB, Bank of Scotland, NatWest and Abbey have all lost their independence. In 1992 Midland, once the world’s largest bank, merged with what is now called HSBC, formerly the Hong Kong and Shanghai Banking Corporation. The Bank of England never stepped in.
The financial market opened to new companies over the years, allowing more venues for lenders and debtors to find assistance and products. The market has become so loose that the Bank of England is faced with an entirely new financial community .
It is now forced to deal with complaints of fraud, scam artists posing as loan officers, and an internet banking community that does not differentiate between firms that deal with UK lenders, and those that deal with off shore lenders. This has caused the financial community to scramble
The industry is rallying to bring stability to their products and services, and protect debtors from being victimized by off shore lenders and unethical sale’s practices. The biggest worry for the UK financial community is that foreign companies will come in and by defaulting UK banks. This fear could be realized if the insolvency rate in the UK grows unchecked.