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Financial regulation and risk management: addressing risk challenges in a changing financial environment


  • Ojo, Marianne


Amongst other goals, this paper aims to address complexities and challenges faced by regulators in identifying and assessing risk, problems arising from different perceptions of risk, and solutions aimed at countering problems of risk regulation. It will approach these issues through an assessment of explanations put forward to justify the growing importance of risks, well known risk theories such as cultural theory, risk society theory and governmentality theory. In addressing the problems posed as a result of the difficulty in quantifying risks, it will consider means whereby risks can be quantified reasonably without the consequential effects which result from the dual nature of risk, that is, risks emanating from the management of institutional risks. “Socio cultural” explanations which relate to how risk is increasingly becoming embedded in organisations and institutions will also be considered as part of those factors attributable to why the financial environment has become transformed to the state in which it currently exists. A consideration of regulatory developments which have contributed to a change in the way financial regulation is carried out, an illustration of how the financial industry and the approach to financial regulation have been transformed by the rapid growth of the hedge funds industry, will also constitute focal points of the paper.

Suggested Citation

  • Ojo, Marianne, 2009. "Financial regulation and risk management: addressing risk challenges in a changing financial environment," MPRA Paper 27424, University Library of Munich, Germany, revised 14 Dec 2010.
  • Handle: RePEc:pra:mprapa:27424

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    References listed on IDEAS

    1. Baldwin, Robert & Cave, Martin & Lodge, Martin, 2011. "Understanding Regulation: Theory, Strategy, and Practice," OUP Catalogue, Oxford University Press, edition 2, number 9780199576098, June.
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    More about this item


    risk; regulation; banks; regulators; audit; financial; hedge funds; governmentality theory; risk society; cultural theory;

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law


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