Does UK and EU legislation and regulation inspire investor confidence in the UK financial services industry?

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Does UK and EU legislation and regulation inspire investor confidence in the UK financial services industry?

Financial services are a term used to refer to the services provided by the financial market. Financial services can also be described as organizations deal with the management of the money. For example, Banks, investment banks, insurance companies, and credit card companies are one member of the financial services industry. It is no doubt that financial services have been one part of our life. Despite the fact that we use the banking services from the high-street bank, we have already get involved in the financial services industry. The financial services industry is worth an estimated £234.2bn. As a result, it plays a key role in the UK economy. Although this is a key industry, which support the whole UK economy in the UK, there were different scandal about the financial services. Some of them had a global impact, which encourage the development of regulations. Besides, more and more regulators had been set up, such as Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) etc. These organization aims to protect and inspire investors’ confidence by regulating firms. In this essay, I will examine whether the regulation and legislation can rebuild the confidence of investors and how they regulate financial services industry.

First of all, in the case of mis-selling payment protection insurance, the financial Conduct Authority (FCA) is involved in the regulation actions. PPI has been mis-sold alongside mortgage, credit cards and other unsecured loans since the 1990s. There were around 45m PPI policies that are worth around £44bn sold by the banks. However, it is not clear that how many of those were mis-sold. The FCA estimates 3m people were affected. From the statistics, we can know the problem went serious. As a result, the FCA has announced a June 2019 deadline for customers to make claims for the mis-selling of payment protection insurance. The customers can claim the money back from the bank, which gives a punishment to the bank. The bank has to repay the money back to its customers. By January 12m customers had received compensation, totaling £24.2bn.
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FCA can really inspire investor confidence by setting up new regulations for the market. Firstly, insurers, banks, brokers and anyone who sells payment protection insurance now need to make sure that the cost of payment protection insurance is made clear in all their marketing material be it printed brochures or their website. If it is a lender or a mortgage broker selling the payment protection insurance, they also need to make it clear that the cover is optional, and that the payment protection insurance can be purchased from other providers. Secondly, the insurers and or brokers have to ...

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