Big Bang, with its removal of self-imposed and, for some, archaic restraints on banking and securities marked a turning point in the operation of the United Kingdom’s financial markets. The emergence of financial conglomerates embracing a range of financial services hitherto unknown brought with it both new opportunities and challenges. An important issue was the position of banks under the new regime: how was the new regulatory scheme to apply to banks conducting traditional deposit-taking business alongside increasing volumes of investment business? In Banking and the Financial Services Act, Blair et al aim to consider this question, by looking at “the effect of the regulatory scheme set up under the Financial Services Act 1986 (FSA) on banks and their business, and the practical steps necessary to achieve compliance with the letter and the spirit of the regulatory requirements” (Preface). While the commentary is extensive, just over one third of the book is devoted to various appendices concerning Securities and Investments Board (SIB) statements of principle, Schedules to the Financial Services Act, Statutory Instruments and EC Directives.

The scene is set in Chapter 1 with an overview of the transformation of the U.K. markets, the new regime, and its relevance to banks. The authors point out that, notwithstanding recent monumental changes in the structure of the U.K. markets, the bulk of banks’ business falls outside the FSA. This, however, does not detract from the fact that there are a number of areas where the FSA poses particular problems for banks. The linchpin of the regime established by the FSA to regulate investment business is set out in s. 3: “no person shall carry on or purport to carry on, investment business in the United Kingdom unless he is an authorised person … or an exempted person … “. This definition is “opened up”, with special emphasis on the meaning of the terms “investment” and “investment business” in Chapter 2. Although at times it is patently clear that what a bank does is investment business