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The Fundamental Principles of Financial Regulation
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There is a widespread view that the Credit Crunch of 2007-9 was, in part, a result of insufficient reach of regulation and that a solution is to take existing regulation and spread it more comprehensively across more institutions and jurisdictions. That would be an incorrect diagnosis. At the heart of the crisis were highly regu- lated institutions in regulated jurisdictions. The crisis has involved a regulatory failure as much as anything else. Our solution is not more regulation per se, though that may well be required in some areas, but better and different regula- tion. This is not the first banking crisis that the world has seen. It is more likely to be nearer the one hundredth. If crises keep repeating themselves, policy should change. But it also means that policy makers should not superficially over-react to the particular characters and colour of the current crisis. Schadenfreude at bankers' expense is satisfying, but it does not really get us anywhere. The crisis should be a call to remedy fundamental market failures that have either been ignored or improperly dealt with in our regulation so far.
Centre for Economic Policy Research - Personal Name
1st Edtion
978-0-9557009-7-2
NONE
The Fundamental Principles of Financial Regulation
Management
English
International Center for Monetary and Banking Studies
2009
USA
1-100
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