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The modernization of world financial markets over the last 20 years has raised profound regulatory challenges. Our article considers whether the United States' Gramm-Leach-Bliley Act of 1999 (GLB) and the United Kingdom's Financial Services and Markets Act 2000 (FSMA) meet those challenges. We posit that the most compelling regulatory issue is not whether the financial industry should be allowed to consolidate. Rather, we believe that the organization and practices of the regulators, i.e., the question of which agencies regulate which firms and under what set of laws, should be the focal point. We call this an issue of regulatory modernization.

We examine how regulatory modernization has been addressed under the GLB and the FSMA. We show how the United States and the United Kingdom have taken distinct approaches to the issue and highlight the weaknesses of each approach. We compare the approaches of the United States and United Kingdom to trends in other countries and offer predictions on the future of reform.



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