The article focuses on the role of banks in the financial crisis and compares the UK and Cyprus, since the banking sector of the latter was founded on the former’s model when it was a British colony. However, Cyprus’ financial sector has been influenced by its accession to the EMU, while the UK remains outside the eurozone. The article begins with the theoretical background, namely the ‘too-big-to-fail’ theory, the deficient banking corporate governance and the ineffective supervision of banks, and how they affected the UK and eurozone crises. Afterwards, the measures imposed by the UK government on its banking sector and the corresponding EU financial measures are discussed. A brief evaluation of the causes of the crisis in Cyprus follows. The article concludes that Cyprus can follow the UK’s example and focus its efforts on bank supervision to improve the financial industry and to avoid a future financial crisis.
banking supervision, regulation, too-big-to-fail, Twin Peak, European Banking Union, bail-in, deposit guarantee
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