Rethinking financial regulation: an appraisal of regulatory approaches in the UK and EU

This article explores different regulatory approaches that have shaped regulation in the run-up to and aftermath of the 2007-09 global financial crisis. In doing so it seeks to clarify and cast fresh light upon the shifting regulatory and practitioner discourse. This in turn is intended to aid reflection on how these approaches might best be adopted, adapted or synchronised to achieve the aims of financial regulation. The first part of this article examines the approaches from a theoretical perspective, discussing their strengths and weaknesses. The second part of the article analyses regulation in practice, focussing primarily on rules-based regulation and principles-based regulation. As a practical example, the article looks at the MiFID directive – a cornerstone of securities regulation - within the EU and UK jurisdictional context. The article concludes with observations and comments on how these approaches might best be coordinated to achieve the broader regulatory agenda.