British financial firms face a tougher regulatory environment after Prime Minister Gordon Brown pledged to “clean up” business practices in the City of London.
Speaking in the days after his government had to engineer a shotgun wedding between two of the country’s largest banks— Lloyds TSB and HBOS—Brown said he would introduce new laws and regulations to restore faith in the financial sector.
The first regulatory salvo was a ban on the practice of short-selling shares, whereby speculators trade in the hope that the price of a company’s shares will fall. Short selling has been blamed for a sudden collapse in the ...