The Governor describes the currents of change that are eroding, and in some areas sweeping away, traditional barriers between different types of financial services. Competition for personal savings, and in housing finance, has already made an impact. More recently, substantial change is in train in the securities area, and in particular in the Stock Exchange.
Such developments, in particular marking the response of the financial services industry to technological change and competition, have implications for the supervisory authorities. While it is important that markets should be able to adapt in a manner that is consistent with maintaining and strengthening the position of London as a leading international financial centre, these changes pose new problems for regulation and supervision as some conventional means of providing client protection and coping with potential conflicts of interest become less appropriate and other means have to be established. Foreign involvement in UK financial markets continues to be welcome though this will need to be properly accommodated in the changing structure and there is need for a strengthening in the capital base of the British securities industry if it is to be able to compete on a fully international basis.
Changing boundaries in financial services - Governors speech to a seminar in Edinburg