The reformed ‘fit and proper’ test : a call for a broader rethink of bank corporate governance?

The recent financial crisis has been followed by a series of regulatory changes concerning both the substance and the structure of financial regulation in the UK and internationally. The move to a new capital adequacy standard under Basel III, the prospective redesigning of regulatory bodies and the new banking resolution regime have all gained much publicity, and the same happened with proposals to ring fence retail banking, to split retail and investment banking, and to break-up large systemic banks. Much less attention, however, has been paid to the recent reform of the ‘fit and proper’ test and to the new regulatory approach to it, as advocated by the FSA.