43,473 research outputs found
Did We Tame the Beast: Views on the US Financial Reform Bill
Prof. Lawrence Baxter takes a microscope to the âDodd-Frankâ Bill (Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173) finding a veritable âMicrographiaâ of doubt. The Bill was devised to address problems associated with the global financial crisis of 2007-2009. This paper was written in anticipation of the US Financial Reform Billâs passage through Congress. The legislation has since been enacted as Public Law No. 111-203, signed by President Obama on July 21, 2010
Capture Nuances in the Contest for Financial Regulation
Applying capture analysis in the hotly contested arena of financial regulation is difficult. Numerous regulators with widely differing missions and widely diverse stakeholders are involved. Regulators operate under widely differing authorizing legislation. They even function at different levels of government. Agencies are often at odds with each other when it comes to determining optimal public policy. Unlike policy disputes in many other areas of regulation, which can be settled by reference to scientific data, public policy in financial regulation rests profoundly on essentially contested economic ideologies. This makes financial policy doubly difficult: one the one hand, it requires deep expertiseâand therefore agency, as opposed to legislativeâdetermination; on the other, this expertise must be informed by prevailing perceptions of which economic principles are most plausible, even though these principles are seldom actually verifiable. It is also often overlooked that financial institutionsâbanks in particularâperform quasigovernmental roles, such that close cooperation between the regulators and the regulated is not only inevitable but also indispensable. âCaptureâ is therefore often just a confusing term of regulatory analysis because it rests on shallow perceptions of the regulatory process. Stakeholders and even the agencies themselves inevitably âcontestâ for the policies they deem most desirable. What is important is to prevent, as far as possible, undue influence by certain stakeholders at the expense of others, and the adequate representation of alternative views in the combative arena of policy competition. The principles of democratic participation remain the important guiding light for financial regulatory reform. This article reviews the fragmented nature of the regulatory process in finance, the close relationship between banks and government, and the emerging forces that might help to make the policy contest more balanced
Fundamental Forces Driving United States and International Financial Regulations Reform
Multiple forces create a systemic crisis of the proportions of the Global Financial Crisis of 2008. Global and domestic financial reform is a difficult and perplexing task, one that is likely to take many years, and one that will surely continue to be shaped by a diverse range of forces. Recent measures remain incomplete and in some cases are even proving to be misdirected. This article considers seven fundamental forces shaping actions on future reform, specifically the (1) long term impact of the Crisis (and all financial crises); (2) increase in the âfinancializationâ of the global economy, seemingly disproportionate to the growth in the real economy; (3) dramatic increase in financial interconnectedness worldwide, accompanied by a growing complexity in financial institutions and the regulatory framework, all of which could be becoming unmanageable; (4) âhuman factorâ in finance, which tends to confound our assumptions about market behavior; (5) growth in the critical yet little understood and regulated âshadow banking system;â (6) deep technology revolution, which continues to transform the dynamics of the global economy; and (7) ânext convergenceâ between Western and âemergingâ economies, which is changing the global economic profile and presenting profound new challenges to financial refor
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