Banking law is a field of finance law where the focus is on all the transactions that occur between lending institutions and the individuals and organisations who borrow money from them. This field of law is very complex, and often a solicitor working in banking law will specialise in one or more subfields, such as bank lending, acquisition finance, or financial services regulation.
As the main process that banks are involved in is lending to individuals and organisations, a large part of banking law is concerned with the processes and procedures involved in arranging loans and other financial transactions.
These processes and procedures can range from fairly simple and straightforward, as in arranging mortgage loans to individuals, to massive, lengthy processes involving large sums of money. For instance, these may be loans for purchasing or developing commercial land, financing of public services or infrastructure, or financing of business acquisitions. In general, the larger a financial transaction is, the more complicated it is to arrange. For very large transactions, such as those made when one organisation purchases or merges with another, the arrangement may take months or even years to finalise.
For banks, the most important aspect of these transactions is that they take on as little risk as possible. This is the reason for another important process in banking law, called due diligence. This is the research carried out by a bank on people and organisations who are applying for loans or financing. For instance, when someone applies for a mortgage, the bank performs due diligence to confirm the financial information provided by the applicant. In a similar process called conditions precedent, the bank examines and verifies supporting documentation provided by the applicant.
Outside of the Bank of England, UK banks are run as private corporations and are subject to the Companies Act 2006. A large part of banking law involves ensuring that banks comply with these and other regulations, and engage in fair lending practices. Solicitors who work in financial services regulation work for banks to help them operate within the bounds of the law.