Macroprudential versus monetary blueprints for financial reform

New books by Avinash Persaud and Morgan Ricks present very different blueprints for financial reform. Persaud builds upon the macroprudential programme to advocate a role for regulators in shepherding risk throughout the financial system. Ricks rejects the direction taken by post-financial crisis regulation, offering a blueprint that addresses the panic-prone nature of money creation in shadow banking. This review article provides a reading of their books which demonstrates how their evaluations of the global financial crisis shape their policy prescriptions. It also suggests that although their blueprints are valuable thought-experiments they have a number of lacunae which economic sociologists and political economists can help fill. In particular, I argue that questions concerning regulatory epistemology, the politics of regulatory reform, and simplicity versus complexity in regulatory rule-making might orient a productive empirical and conceptual research agenda.