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The Global Crisis: Why Regulators Resist Reforms

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  • Leo F. Goodstadt

    (Hong Kong Institute for Monetary Research, Trinity College, University of Dublin, The University of Hong Kong)

Abstract

An Anglo-American regulatory ¡¥culture¡¦ became associated with 30 years of worldwide economic reforms, global growth and monetary stability. American and British officials identified major sources of instability in their own financial markets before 2007 but remained non-interventionist, invoking the concepts of virtuous markets and moral hazard. They also ignored the policy defects revealed by past crises. Despite record banking losses and fiscal imbalances during the global crisis, their current resistance to regulatory reforms is supported by a powerful political and business consensus.

Suggested Citation

  • Leo F. Goodstadt, 2009. "The Global Crisis: Why Regulators Resist Reforms," Working Papers 322009, Hong Kong Institute for Monetary Research.
  • Handle: RePEc:hkm:wpaper:322009
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    References listed on IDEAS

    as
    1. Ranciere, Romain & Tornell, Aaron & Westermann, Frank, 2006. "Decomposing the effects of financial liberalization: Crises vs. growth," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3331-3348, December.
    2. J. Caprio & P. Honohan, 2000. "Restoring Banking Stability: Beyond Supervised Capital Requirements," South African Journal of Economics, Economic Society of South Africa, vol. 68(1), pages 5-22, March.
    3. Flannery, Mark J, 1998. "Using Market Information in Prudential Bank Supervision: A Review of the U.S. Empirical Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 273-305, August.
    4. Sanghoon Ahn & Philip Hemmings, 2000. "Policy Influences on Economic Growth in OECD Countries: An Evaluation of the Evidence," OECD Economics Department Working Papers 246, OECD Publishing.
    5. Berndt, Antje & Gupta, Anurag, 2009. "Moral hazard and adverse selection in the originate-to-distribute model of bank credit," Journal of Monetary Economics, Elsevier, vol. 56(5), pages 725-743, July.
    6. Simmons, Beth A., 2001. "The International Politics of Harmonization: The Case of Capital Market Regulation," International Organization, Cambridge University Press, vol. 55(03), pages 589-620, June.
    7. Singer, David Andrew, 2004. "Capital Rules: The Domestic Politics of International Regulatory Harmonization," International Organization, Cambridge University Press, vol. 58(03), pages 531-565, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Non-Interventionism; Basel; Virtuous Markets; Moral Hazard; Regulatory Culture;

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