The banking industry has undergone major reform in the years since the financial crisis to make it more stable and secure.
EU regulation has made banks safer by making them hold more capital, so that the taxpayer never again has to bail out a bank. Internationally agreed standards on “more capital, more liquidity” across the European Union are now being implemented, Business Recorder reported.
Today, UK banks hold five times as much capital as they did at the beginning of the financial crisis. There is now a cap on remuneration, and bonuses for those working in financial services and insurance have fallen by 50 percent since the crisis.
UK banks have also taken part in the Bank of England’s and the European Central Bank’s stress tests. The results of these tests confirmed that the UK banking industry is in a much stronger position today and recent reforms are working.
Financial risk has been mitigated further by the introduction of the Senior Managers Regime. This will take effect in 2016, and will strengthen accountability at the very top of our financial institutions, introducing more personal responsibility for executives when they take key decisions about their businesses. These measures are positive moves towards restoring public trust and confidence in the banking sector, and as a result the financial system is more stable and secure today.
Another report says that if proposed EU data protection rules prevent insurers from carrying out essential functions, such as fighting fraud, the cost of insurance will grow.
Given that processing policyholder data lies at the very heart of their businesses, insurers are particularly sensitive to the importance of keeping it safe.
