FINANCIAL DEVELOPMENT IN A COUNTRY OF YOUR CHOICE Essay

fiscal DEVELOPMENT IN A COUNTRY OF YOUR CHOICE - Essay ExampleHow ever so the modern UK banking and pay owe their evolution to the Crowns dissolution of the monasteries which acted as money keepers in the 1530s.( Chen 19831400).Today the UK banking system is exceedingly advanced in terms of the globalization of its pecuniary markets. The constant development and innovation in its financial operations and strategies has changed both its operational and structural financial landscape. Currently it is highly influenced by the Basel Committee (under the assert of International Settlements) which was formed in response to the crises caused by the insolvency of commitaus Herstatt and the problems caused by Nixons announcement of the closure of the Golden window ,has worked since 1974 to prevent such risks from injuring the health and wealth of such financial institutions.Of more importance however is the UKs present-day(prenominal) monetary policy which is aimed at delivering price stability which is a result of pitiful inflation (with the Governments inflation target of 2%. expressed in terms of an annual rate of inflation ground on the Consumer Prices Index (CPI).)Currently the Bank of England with its powers under the Bank of England Act 1998 has the role of the financial regulator and can set apart raise rank with little interference from the government.(expressed in terms of an annual rate of inflation based on the Consumer Prices Index (CPI). The decade of the nineties demonstrated low and relatively st commensurate interest rates in contrast to the high and volatile interest rates which haunted the economy in the seventies.The interest rates also fell following the 9/11 incident,yet the UK financial sector saw certain(prenominal) booms with in the housing sector as interest rates increased in 2004.However the current low interest rates are affecting the system of bond markets, currency markets and stock markets.This has also reportedly led to an increase in the to income ratio for consumers.Before the FSA (Financial service Authority) became the statutory banking supervisor of the UK through the Financial Services and Markets Act 2000,UK bank supervision was the responsibility of the Bank of England. The Bank of England has been an informal supervisor for British Banks ever since the mid nineteenth century but the Bank of England Act 1979 confirmed these powers by granting it be able to approve or refuse authorization to carry out banking business in the UK. Employment and pomposityRecent statistics show that things are improving in terms of microeconomic indicators like that of employment and rock-bottom inflation.The diagram below gives a rough estimate of the UK interest rates This is because during the past few historic period the UK has had much success in controlling interest rate fuelled inflationary problems.Employment in the UK reached 29 million in 2006 for the first time the highest figure since comparable rec ords began in 19711.New evidence from the Bank of England however Inflation Report2 suggests that UK has been hit by stagflation in its financial sector In the central projection, higher(prenominal) energy and import prices push inflation above the target in the near term. Inflation therefore falls back to