After the minibond debacle, it might be a favorable time to look at an new arrangement that whether single regulator could be a right way in the long term if financial institutions were providing unified multiple financial services. However, we have to study what’s the advantage and what’s the disadvantage. According to the UK’s financial services authority single regulator model, The advantage of single regulator is that Single regulator is efficient. It will be more efficient in allocating resources.
A single regulator’s position allows it to look across the entire financial industry and devote regulatory resources (both human as well as financial resources) to where they are most needed. Secondly, the United Kingdom’s FSA covers and unify a broad set of regulatory activities and the scope of its regulatory functions spread beyond main-stream financial services providers that reduce the overlap authority of different regulatory regimes Besides, we should also consider the disadvantage of using single regulator model, First, lack of adequate legal and regulatory foundations.
When we need to use a unified single regulator to replace an existing regime of multiple regulators, we should ensure that a good legislative foundation include proper appeal processes and procedures. We believe that it would be a expensive process requiring different participants and creates large operating costs. Second, single regulator may cause merger-related difficulties. A major problem is merging the organisational culture of different regulatory bodies, each with different behavior and a particular method of working.
If the merge is not well managed, it may cause the potential for internal conflicts leading and confuse between the regulators and the regulated institutions Third, it may reduce regulatory capacity. There is the possibility that having a single financial sector regulator could reduce the scope for innovation among providers of financial services. It may be difficult for such a regulator to remain capacity enough to keep up with the pace of change in the markets without the creativity and legitimate progress of participants and regulated entities.