The regulatory failure: the saga of BCCI Available to Purchase

Analyses where the auditors and regulators went wrong in the attempting to prevent the collapse of the Bank of Credit and Commerce International (BCCI) in 1991; the Bank was dogged by rumours of money laundering and dubious practices, and the result was the loss of many jobs and bank deposits. Looks at the roles of Price‐WaterhouseCoopers, who became sole auditors of BCCI in 1988, and of previous auditors Ernst & Young. Criticises the regulatory performance of the Bank of England, in particular the lack of communication between it and Price‐WaterhouseCoopers. Suggests that an independent banking regulator is needed in the UK based on a new statutory regulatory structure, and that the 1987 Banking Act may have prevented the Bank of England achieving effective regulation.