A Critical Analysis of the Regulatory and Macroprudential Policies in the UK

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Abstract The focus of the study is the regulatory and macroprudential policies applicable in the UK and EU banking sectors during Covid-19. The research utilises a qualitative research method, whereby secondary data was sourced from journal articles, legislation, books, websites, and reports. Considering the adverse impacts of the pandemic, the study argues that the development of macroprudential policies (MPMs) meant to mitigate systemic risks through regulating the endeavours and practices of the UK and EU financial institutions requires necessary legal frameworks for subsequent efficacy of these policies. MPMs are crucial tools in the regulation of banking institutions by mitigating systemic risks and reducing the occurrence of financial crises. The study has explored the instruments applied by the UK and EU regulators to address the issues emerging from Covid-19 and further assessed their efficacy. The research also identified factors such as multiagency coordination, development and amendment of relevant laws, strategic planning and stakeholder collaboration as crucial in fostering the effectiveness of the policies. The project also proposed some recommendations relevant to the current topic and has provided suggestions for future research. Keywords: banking sector, Covid-19, macroprudential policies, Integrated Policy Framework.