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Financial re-regulation at a crossroads: How the European experience strengthens the case for a radical reform built on Minsky's approach

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  • Mario Tonveronachi

    () (University of Siena)

  • Elisabetta Montanaro

    () (University of Siena)

Abstract

The current financial and sovereign crisis is pushing European politicians and EU bureaucrats to devise new institutional and policy solutions. However, the new EU institutional framework and stricter regulatory requirements do not introduce significant changes in the laissez-faire nature of the regulatory approach. Our opinion is that the entire re-regulation process does not go to the roots of how financial fragility endogenously accumulates, and how finally it produces a crisis each time starting from the weakest part of the financial system. Analysing the European banking sectors from this perspective, we show how domestic specificities add to the limits due to risk-based regulation and supervision. We then build on Minskys regulatory proposals to present the skeleton of a simple alternative to the existing regulatory approach.

Suggested Citation

  • Mario Tonveronachi & Elisabetta Montanaro, 2012. "Financial re-regulation at a crossroads: How the European experience strengthens the case for a radical reform built on Minsky's approach," PSL Quarterly Review, Economia civile, vol. 65(263), pages 335-383.
  • Handle: RePEc:psl:pslqrr:2012:41
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10194/10083
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mario Tonveronachi, 2013. "L'Unione Bancaria Europea. Di nuovo un disegno istituzionale incompleto (The European banking union. An incomplete institutional design, again)," Moneta e Credito, Economia civile, vol. 66(264), pages 397-413.
    2. Alessandro Roncaglia, 2013. "Hyman Minsky's monetary production economy," PSL Quarterly Review, Economia civile, vol. 66(265), pages 77-94.
    3. Alessandro Roncaglia, 2013. "Il ruolo delle istituzioni nellÕeconomia: introduzione," Moneta e Credito, Economia civile, vol. 66(261), pages 1-4.
    4. Alessandro Roncaglia, 2013. "Introduction," PSL Quarterly Review, Economia civile, vol. 66(267), pages 369-370.
    5. Mario Tonveronachi, 2013. "De-globalising bank regulation," PSL Quarterly Review, Economia civile, vol. 66(267), pages 371-385.

    More about this item

    Keywords

    financial regulation; financial fragility; European banks;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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