Reforming Finance; A Literature Review
AbstractThe almost consensual view on the global financial crisis is that it should be attributed to massive regulatory failure. Regulation is either argued to have failed in constraining an inherently instable financial system or to have provoked the crisis by means of inappropriate regulatory changes. Even though a core conclusion from the present crisis is that a microeconomic focus on financial stability does not suffice and will need to be complemented by macroprudential regulation, there is also widespread consensus that the crisis has demonstrated the need to strengthen the microprudential regulatory framework itself. This literature review focuses on the microeconomic aspects of financial regulation. It is built around three main questions: what exactly did the regulatory failure consists of? How was it possible for regulatory failure to emerge? What lessons have been drawn from the crisis? Not surprisingly, the consensus in the literature evaporates when looking for precise answers to these questions. The introductory section of the paper address two broader question; i.e. why financial firms should be subjected to tighter regulation than the rest of the economy and how financial instability may be defined and measured.
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Bibliographic InfoPaper provided by Financialisation, Economy, Society & Sustainable Development (FESSUD) Project in its series Working papers with number wpaper08.
Length: 91 pages
Date of creation: 03 Dec 2013
Date of revision:
Contact details of provider:
Postal: FESSUD Co-ordinator (Malcolm Sawyer) Leeds University Business School Maurice Keyworth Buidling Leeds LS2 9JT
Banking Union; Corporate Governance; Credit Rating Agencies; Financial Sector Reform; Financial Stability; Household; Indebtedness; Microprudential Regulation; Shadow Banking; Sovereign Debt;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-15 (All new papers)
- NEP-BAN-2014-02-15 (Banking)
- NEP-CFN-2014-02-15 (Corporate Finance)
- NEP-FMK-2014-02-15 (Financial Markets)
- NEP-HPE-2014-02-15 (History & Philosophy of Economics)
- NEP-SOG-2014-02-15 (Sociology of Economics)
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