Recent Performance of Banking Sector in UK

Recent Performance of Banking Sector in UK

Introduction

After a downturn in economic activity in the postwar years in the late 21st century, there was a relative stabilization of economic situation in the UK. The downturn was in particular, the increased concentration of banking and industrial capital. The peculiarity of the country's financial institutions is the large share of bank capital, flexible organizational structure of financial-industrial groups, which are often a consortium controlling a variety of spheres of the economy. The following essay will analyze the recent performance of the banking sector in United Kingdom.

Discussions

Before the essay includes the performance of the banking sector of United Kingdom, it is important to highlight the banking system of Great Britain and its operations.

The Banking System of Great Britain (England)

UK banking system is one of the oldest. It is characterized by a high degree of concentration and specialization, well developed banking infrastructure, a close relationship with the international market for loan capital. In a world financial center - London is working more and more foreign banks than English. This is primarily American and Japanese banks. The share of foreign currency deposits in UK banks is significantly higher than in other countries. The English banking system has the most extensive worldwide network of foreign affiliates.

Until 1979 in Britain there was no specific legislation governing the banking, has never published an official list of banks, there was no legal definition of the bank. Control of the central bank for the banks wore informal. (www.bankofengland.co.uk)

With the adoption of the law on banking in 1979, all credit institutions that take deposits (deposits) are classified by the Bank of England, or as a "recognized bank" or as "a company licensed to accept deposits." Banks do not need a license, but they must be "recognized" by the Bank of England. Bank of England recognizes as a "bank" credit institution enjoys an impeccable reputation in financial circles, and provides a wide range of banking services and specializes in a certain category of services.

The most important are the credit institutions that have received the status of the bank - a depository banks (the London and Scottish clearing banks, banks, Northern Ireland), trade, foreign banks, savings banks, discount houses. The banking system is a two-tier UK. At the top level comes the central bank and on the ground comes other banks: commercial (depository) and specialized - trade, foreign banks, savings banks, discount houses.

Recent Performance of the Banking Sector

The banking sector of the United Kingdom is the third largest in the world after the U.S. and Japan. Apart from the fact that here operates one of the largest banking industries, the United Kingdom is also the largest center for investment and private banking. The banking sector of the United Kingdom has a strong international orientation, which is reflected in a significant foreign presence and the large assets of foreign banks in London.

The number of authorized banks in the United Kingdom in 2004 amounted to about ...