This book provides an introduction to financial supervision as practiced and discussed by stakeholders and in academia. It covers the "why, who, and by whom" issues of financial supervision, offering international comparisons as well as perspectives from different academic disciplines such as law, finance, economics and public administration. The books is based on an extensive survey of available research and publications on the topics covered, as well as a large number of interviews with stakeholders at different levels and in different countries who work with the implementation, enforcement and/or compliance with financial regulation on a daily basis. By recognizing the multi-disciplinary nature of financial supervision the book will be of interest to both practitioners, students and academics, and respond to the growing need for authoritative guidance in this complex area.

2007 and 2008 saw the biggest financial crisis since the 1930s. Banks looking for better yields from plentiful, cheap money made much more use of complex financial instruments, without fully understanding the risks to which they were exposing themselves and the financial system. Defaults on subprime mortgages underlying some of the instruments shattered confidence and financial markets seized up. The framework of regulation and supervision in Britain failed to avoid or mitigate the crisis. The tripartite authorities in the United Kingdom - Bank of England, Financial Services Authority (FSA) and HM Treasury - failed to maintain financial stability and were found wanting, in part because the roles of the three parties were not well enough defined and it was not clear who was in charge. Too little attention was paid to macro-prudential supervision (oversight of the aggregate impact on financial stability of individual banks' actions). Only the Bank of England and the