Regulatory Issues in Electronic Money: A Legal-Economics Analysis
AbstractIn this paper we examine regulatory issues relating to electronic money. The discussion proceeds along three main lines. Firstly, the focus of attention on the potential risks to the financial system is typically on the systemic risk arising from the payments system. Since issuers of electronic money automatically become part of the payments system, we consider if the arguments relating to systemic risk originating in the payments system apply in the case of electronic money. Secondly, we examine the sharp divergence in regulatory approaches between the US and the EU, and suggest that a useful way of reconciling this divergence is to note the existence of a tradeoff between the efficiency of the financial system and the amount of risk assumed by the public sector. This means that there is not necessarily a 'correct' answer to the question of the desirability of regulation. Thirdly, technological advances and financial innovations have made it easier for firms to engage in regulatory arbitrage. Competitive pressures may have encouraged financial centres to engage in competitive deregulation, resulting in a less than socially optimal level of regulation overall. It is therefore important that national authorities coordinate and harmonise their regulatory policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp98-02.
Length: 31 pages
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html
More information through EDIRC
REGULATION ; ELECTRONIC MONEY ; FINANCIAL SYSTEMS;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Selgin, G.A. & White, L.H., 1993.
"How Would the Invisible Hand Handle Money?,"
380e, Georgia - College of Business Administration, Department of Economics.
- Benston, George J & Kaufman, George G, 1996. "The Appropriate Role of Bank Regulation," Economic Journal, Royal Economic Society, vol. 106(436), pages 688-97, May.
- Franklin R. Edwards & Frederic S. Mishkin, 1995.
"The decline of traditional banking: implications for financial stability and regulatory policy,"
Economic Policy Review,
Federal Reserve Bank of New York, issue Jul, pages 27-45.
- Franklin R. Edwards & Frederic S. Mishkin, 1995. "The Decline of Traditional Banking: Implications for Financial Stabilityand Regulatory Policy," NBER Working Papers 4993, National Bureau of Economic Research, Inc.
- Thomas M. Hoenig, 1996. "Rethinking financial regulation," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 5-13.
- Wolfgang HÄRDLE & J. MARRON & L. YANG, 1996. "Discussion," SFB 373 Discussion Papers 1996,65, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- William H. Branson & Jacob A. Frenkel & Morris Goldstein, 1990. "International Policy Coordination and Exchange Rate Fluctuations," NBER Books, National Bureau of Economic Research, Inc, number bran90-1, October.
- Robert Litan & William Isaac & William Taylor, 1994. "Financial Regulation," NBER Chapters, in: American Economic Policy in the 1980s, pages 519-572 National Bureau of Economic Research, Inc.
- Dowd, Kevin, 1996. "The Case for Financial Laissez-Faire," Economic Journal, Royal Economic Society, vol. 106(436), pages 679-87, May.
- David Folkerts-Landau, 1990. "The Case for International Coordination of Financial Policy," NBER Chapters, in: International Policy Coordination and Exchange Rate Fluctuations, pages 279-306 National Bureau of Economic Research, Inc.
- repec:wop:humbsf:1996-65 is not listed on IDEAS
- Gilles Oudiz & Jeffrey Sachs, 1984. "Macroeconomic Policy Coordination among the Industrial Economies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(1), pages 1-76.
- Gerald P. O'Driscoll, Jr., 1988. "Deposit Insurance in Theory and Practice," Cato Journal, Cato Journal, Cato Institute, vol. 7(3), pages 661-681, Winter.
- Thomas M. Hoenig, 1997. "Bank regulation: asking the right questions," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 5-10.
- Richard Dale, 1996. "Regulating the New Financial Markets," RBA Annual Conference Volume, in: Malcom Edey (ed.), The Future of the Financial System Reserve Bank of Australia.
- Laureano Escudero & M. Ortuño & V. Campos & Reinhardt Euler & Michael Jünger, 1996. "Discussion," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 4(1), pages 54-64, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Siminski).
If references are entirely missing, you can add them using this form.