Abstract: Although similarities between the British and American systems of financial
regulation are often remarked upon in academic commentary, the organizational structure
of financial supervision in the two countries has diverged substantially in the past decade,
as the United Kingdom has now largely consolidated its financial regulatory agencies in the
Financial Services Authority whereas the United States has maintained the world’s most
decentralized and fragmented collection of financial supervisory agencies. In this essay,
Professor Howell Jackson explores various reasons why financial regulation in these two
countries differs so dramatically in organizational structure. Focusing first on the
differences in political economy that surrounded the enactment of the Financial Services and
Markets Act of 2000 in the United Kingdom and the Gramm-Leach-Bliley Act of 1999 in the
United States, Professor Jackson discusses deeper differences in the regulatory philosophies
of the two countries and also presents data on the relative intensity of financial regulation
in both jurisdiction. He speculates that the comparatively more ambitious regulatory agenda
of the U.S. system pushes the country towards a more elaborate system of financial oversight
that is inherently more difficult to consolidate. In the United Kingdom, in contrast, the goals
of the financial regulators are more modest and, to the extent that cost efficiency is one of
the country’s regulatory objectives in the field of financial regulation, that policy tends to
foster a less cumbersome system of financial regulation that more easily accommodates
consolidation of regulatory functions. The paper concludes with some broader comparative
data suggesting that while British financial regulation may be less intensive than financial
regulation in the United States, it is substantially more intensive than financial regulation
in many other jurisdictions, particularly civil law jurisdictions on the Continent.