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It’s Broke, Let’s Fix It: Rethinking Financial Regulation

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  • Alan S. Blinder

    (Princeton University)

Abstract

This paper considers a wide range of financial reform issues, focusing on macroprudential regulation and on the recent reforms in the United States—although the principles apply globally. It emphasizes such issues as the needs for a systemic risk regulator and an orderly resolution mechanism for systemically important financial institutions, the risks posed by proprietary trading and skewed compensation incentives, and the design of new capital and liquidity requirements for banks. Throughout, an attempt is made to relate concrete regulatory proposals to the abstract principles that should govern financial regulation.

Suggested Citation

  • Alan S. Blinder, 2010. "It’s Broke, Let’s Fix It: Rethinking Financial Regulation," International Journal of Central Banking, International Journal of Central Banking, vol. 6(34), pages 277-330, December.
    • Handle: RePEc:ijc:ijcjou:y:2010:q:4:a:13
    as

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    References listed on IDEAS

    as
    1. Barrell, Ray & Davis, E. Philip & Karim, Dilruba & Liadze, Iana, 2010. "Bank regulation, property prices and early warning systems for banking crises in OECD countries," Journal of Banking & Finance, Elsevier, vol. 34(9), pages 2255-2264, September.
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    Cited by:

    1. Krug, Sebastian & Wohltmann, Hans-Werner, 2016. "Shadow banking, financial regulation and animal spirits: An ACE approach," Economics Working Papers 2016-08, Christian-Albrechts-University of Kiel, Department of Economics.
    2. Klaus Schaeck & Martin Cihák, 2014. "Competition, Efficiency, and Stability in Banking," Financial Management, Financial Management Association International, vol. 43(1), pages 215-241, March.
    3. Paola Argüello Kalpa & María Alexandra Ortiz Cabrera, 2020. "Colección Enrique Low Murtra. Tomo XIII, Derecho económico," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1274, October.
    4. Le, Vo Phuong Mai & Meenagh, David & Minford, Patrick, 2018. "Financial stability: To regulate or not? A public choice inquiry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 57(C), pages 127-140.
    5. Gai, Prasanna & Kemp, Malcolm & Sánchez Serrano, Antonio & Schnabel, Isabel, 2019. "Regulatory complexity and the quest for robust regulation," Report of the Advisory Scientific Committee 8, European Systemic Risk Board.
    6. Axel Wieneke, 2016. "Better Financial Innovation via Innovative Finance of Supervisors," Economic Papers, The Economic Society of Australia, vol. 35(1), pages 16-23, March.
    7. Claudio Oliveira De Moraes & Helder Ferreira de Mendonça, 2017. "The bridge between macro and micro banking regulation," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 44(2), pages 214-225, May.
    8. Alan S. Blinder, 2015. "Financial Entropy and the Optimality of Over-regulation," World Scientific Book Chapters, in: Douglas D Evanoff & Andrew G Haldane & George G Kaufman (ed.), The New International Financial System Analyzing the Cumulative Impact of Regulatory Reform, chapter 1, pages 3-35, World Scientific Publishing Co. Pte. Ltd..
    9. Mario Bergara & Gerardo Licandro & Jorge Ponce, 2012. "Financial stability nets. Complementing and reinforcing micro and macro perspectives," Documentos de trabajo 2012002, Banco Central del Uruguay.
    10. Ítalo Pedrosa & Maryse Farhi, 2015. "Macroeconomic theory in the aftermath of the crisis: mainstream and new Keynesianism [Macroeconomic theory in the aftermath of the crisis: mainstream and new Keynesianism]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 25(2), pages 237-260, May-Augus.
    11. Giuseppe Mastromatteo & Giuseppe Mastromatteo, 2016. "Minsky at Basel: A Global Cap to Build an Effective Postcrisis Banking Supervision Framework," Economics Working Paper Archive wp_875, Levy Economics Institute.

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    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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