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Here, it involves directing, governing or controlling the banking system. This can be achieved through legislation (laws) or in this case by a regulatory agency (or agencies), the Financial Services Authority in the UK- a sole authority of regulation (CASU, BARBARA and GIRARDONE, CLAUDIA and MOLYNEUX, PHILIP, 2006, p.161).
Supervision relates to general governing. It does not essentially mean direct but management of the behaviour of financial firms (CASU, BARBARA and GIRARDONE, CLAUDIA and MOLYNEUX, PHILIP, 2006, p.161).
The history, emergence and rationale for regulation
The regulation and supervision of banks of in general may be deemed a controversial issue...
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