Bank regulation: asking the right questions
If we are to modernize our regulatory system and allow banks the flexibility to adapt to financial change, it is essential that we ask the right questions about the purposes of bank regulation. Currently, much of the regulatory debate focuses on the age-old question: Where do we draw the line between banks and other financial and nonfinancial institutions? As important as this question is, however, it begs a more fundamental question: Why do we regulate banks differently than other institutions? Unless we can answer this basic question, it is possible that we may never achieve consensus on fundamental reform and will continue to rely on an incremental, reactive approach to bank regulation.> In an article based on comments made at the 1996 Federal Reserve/Deloitte Touch Banking Symposium in Houston, Mr. Hoenig suggests that we need to look beyond traditional arguments for bank regulation that focus on protection of bank depositors and the federal safety net. In his view, a compelling reason for bank regulation is to maintain the integrity of the payments system. Focusing on the payments system provides us with insight into two aspects of the current debate over bank regulation. First, the payments system gives us a clear rationale for drawing lines between banks and other financial institutions. Second, focusing on the payments system may provide new ideas on how we should regulate banks as we move into the next century.
Volume (Year): (1997)
Issue (Month): Q I ()
|Contact details of provider:|| Postal: One Memorial Drive, Kansas City, MO 64198|
Phone: (816) 881-2254
Web page: http://www.kansascityfed.org
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:1997:i:qi:p:5-10:n:v.82no,1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LDayrit)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.