Top two countries with the most developed financial system in the EU are Germany and the United Kingdom. Both countries are similar in terms of the universal banking system, but are different in detail. In Germany, the Banking Act does apparently authorize a pure universal bank model, thereby allowing many commercial banks to conduct securities businesses directly under their roofs. German banks are allowed to conduct broad scopes of financial activities including commercial banking and investment banking and so forth. The Germany banking system contributed to the enactment of 'the EC Credit Institutions Directive of 2000' (hereinafter 'the Directive 2000'). Due to a current global financial crisis caused by the bankruptcy of the Lehman Brothers in 2008, the U.S. Congress swiftly enacted 'the Dodd-Frank Wall Street Reform and Consumer Protection Act' (hereinafter 'the Dodd-Frank Act') which has been effective since July of 2010. The Dodd-Frank Act includes the Volker Rule which prohibits commercial banks from conducting securities activities by their own accounts and from investing PEFs and hedge funds. This event make us reconsider the EU banking system itself in order to determine that the EU will also need to reform its system based on either the Volker Rule or the Dodd-Frank Act. The commercial banking department of a pure universal bank may be easily subject to contagion from serious risks of an investment banking department such as a subprime crisis. If all the EU countries adopted the Directive 2000 based on the German banking system, they would be severely impaired by the sub-prime crisis. However, this is not the case because the U.K. has established its own universal banking model, so called a subsidiary model, rather than faithfully following to the Directive 2000. This paper overviews the current U.K. model and analyzes deeply reasons why the U.K. has developed its own universal banking model different from other EU countries. Old Acts and practices are also considered. Part II generally introduces the universal bank model of the Directive 2000 in order to emphasize the unique characters of a subsidiary model in the U.K. Part Ⅲ deals with the overall U.K. universal banking model, views the background of a Big Bang in 1987, and analyzes the permissible securities activities of a subsidiary corporation in a financial group. Part Ⅳ refers to the conflict of interest problems in a financial group when conducting both commercial banking and investment banking activities and searches any tools for solving those problems in the context of either current laws or self regulations. Finally, part Ⅴ is a conclusion of this paper.