It is fair to say that reforming the regulation of the financial sector is currently one of the most hotly debated issues on the policymaking agenda. Proposals for such reform are proliferating, and the official sector appears committed to adopting at least some meaningful reforms in the near-term. Broadly speaking, this movement toward regulatory reform emphasizes the need for structural reforms, outlines specific rules and regulations targeting primarily the perceived causes of the current crisis, and is carried along by a strong sense of the moment. Rather than add to the body of institutional and substantive proposals, this Article articulates a strategic approach to regulatory reform as a process of designing and implementing a fundamental change in the paradigm of financial regulation. That process would begin with a comprehensive survey of emergent post-crisis financial markets. That inventory-taking would identify the key risks present in various market segments and would provide the basis for articulating the desirable substance and scope of financial regulation and comparing the optimal framework with the existing one. Finally, policymakers would employ the current and comprehensive data and analysis obtained in these first two steps to determine whether, and how, to reform the institutional structure of financial regulation. Ideally, such an approach would reduce the potential for unnecessary or unproductive regulatory reforms and help policymakers achieve the right balance between efficient regulation and crisis prevention going forward. It may be naive to expect that policymakers, driven either by genuine commitment to serve public interest goals or by more narrow political calculations, will forego a rare chance to pursue regulatory reforms in the immediate wake of the current crisis. Nevertheless, the proposal advanced in this Article has a significant pragmatic value. First and foremost, it offers a model approach to redesigning the regulation of financial services sector in a coherent and measured way. At the same time, even if this approach is not carried out in practice, there may be significant value in holding it out as a theoretical ideal. It may be, for example, that articulating an ideal process for financial regulatory reform will help frame important issues that may influence whatever reform process is actually undertaken. It may cause policymakers to try to limit the impact of crisis-containment measures and to reduce the chances that these measures will constrain future options for reform. It may also help influence policymakers to eschew an approach that begins with changes to regulatory structure and to focus more on what they perceive will be the significant risks embedded in post-crisis financial markets
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