The purpose of this essay is to explain why banks are regulated in the UK and inadequacy of the previous regulatory framework linked with failing banks. Three banks will be discussed: Johnson Matthey Bankers (JMB), Barings and Northern Rock. The market conditions which contributed to cause difficulties for Northern Rock will be discussed. Why Regulate Banks? As Benston and Kaufman state in an article in the May 1996 issue of the Economic Journal, “they don’t serve food that might sicken unsuspecting customers and they don’t deal in dangerous materials that might explode or cause plagues. Rather, they provide checking accounts and investment services, make loans, and facilitate financial transactions.” Why should we be concerned with banks, more than other business.