IDEAS home Printed from
   My bibliography  Save this paper

The emerging new architecture of financial regulation


  • Goodhart, Charles


Now is a good time to take stock of progress in the reform of financial regulation. Much has been happening. The monumental Dodd-Frank Act was passed by the US Congress in July 2010. The deliberations and conclusions of the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB) are being put to the G-20 Heads of State in Seoul in November. In the UK the Vickers Committee has been asked to report on the structure of the banking sector by summer 2011. Some have argued from time to time that the momentum of financial regulatory reform was being lost; it is now two full years since the catastrophe of autumn 2008, and little seems to have been finally agreed. In fact the reverse is nearer the truth. In view of the power and predominance of the USA, it makes little sense for the rest of the world to try to press ahead with plans for the achievement of international regulatory agreements until the Americans have come to some outline decisions. In Congress the reform of financial regulation was given second priority, after the reform of their health-care program, and this has now resulted in the Dodd-Frank Act. Following that, financial regulators around the globe now can, and will, press forward to agree and then to implement revised and reformed plans for financial regulation. The danger, as I shall try to document below, is not that enthusiasm and efforts for undertaking such reforms are dissipating and running into the sand, but rather that in several respects the proposed reforms are incomplete and/or partially misdirected.

Suggested Citation

  • Goodhart, Charles, 2011. "The emerging new architecture of financial regulation," CFS Working Paper Series 2011/12, Center for Financial Studies (CFS).
  • Handle: RePEc:zbw:cfswop:201112

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Raj Chetty & Emmanuel Saez, 2005. "Dividend Taxes and Corporate Behavior: Evidence from the 2003 Dividend Tax Cut," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 791-833.
    2. Giacomo Corneo, 2005. "The Rise and Likely Fall of the German Income Tax, 1958–2005," CESifo Economic Studies, CESifo, vol. 51(1), pages 159-186.
    3. Irwin Tepper, 1981. "Taxation and Corporate Pension Policy," NBER Working Papers 0661, National Bureau of Economic Research, Inc.
    4. Eugene F. Fama & Kenneth R. French, 2002. "The Equity Premium," Journal of Finance, American Finance Association, vol. 57(2), pages 637-659, April.
    5. Jennifer Huang, 2008. "Taxable and Tax-Deferred Investing: A Tax-Arbitrage Approach," Review of Financial Studies, Society for Financial Studies, vol. 21(5), pages 2173-2207, September.
    6. Poterba, James M. & Samwick, Andrew A., 2003. "Taxation and household portfolio composition: US evidence from the 1980s and 1990s," Journal of Public Economics, Elsevier, vol. 87(1), pages 5-38, January.
    7. Alan J. Auerbach & Mervyn A. King, 1983. "Taxation, Portfolio Choice, and Debt-Equity Ratios: A General Equilibrium Model," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 587-609.
    8. Perotti, Enrico & Schwienbacher, Armin, 2009. "The political origin of pension funding," Journal of Financial Intermediation, Elsevier, vol. 18(3), pages 384-404, July.
    9. Kenneth R. French, 2008. "Presidential Address: The Cost of Active Investing," Journal of Finance, American Finance Association, vol. 63(4), pages 1537-1573, August.
    10. Robert M. Dammon & Chester S. Spatt & Harold H. Zhang, 2004. "Optimal Asset Location and Allocation with Taxable and Tax-Deferred Investing," Journal of Finance, American Finance Association, vol. 59(3), pages 999-1037, June.
    11. Green, Richard C. & Hollifield, Burton, 2003. "The personal-tax advantages of equity," Journal of Financial Economics, Elsevier, vol. 67(2), pages 175-216, February.
    12. Clemens Sialm, 2009. "Tax Changes and Asset Pricing," American Economic Review, American Economic Association, vol. 99(4), pages 1356-1383, September.
    13. J. B. Chay & Dosoung Choi & Jeffrey Pontiff, 2006. "Market Valuation of Tax-Timing Options: Evidence from Capital Gains Distributions," Journal of Finance, American Finance Association, vol. 61(2), pages 837-865, April.
    14. Ishi, Hiromitsu, 2001. "The Japanese Tax System," OUP Catalogue, Oxford University Press, edition 3, number 9780199242566.
    15. Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-275, May.
    16. Tepper, Irwin, 1981. "Taxation and Corporate Pension Policy," Journal of Finance, American Finance Association, vol. 36(1), pages 1-13, March.
    17. Julian Franks & Colin Mayer & Hannes Wagner, 2006. "The Origins of the German Corporation - Finance, Ownership and Control," Review of Finance, European Finance Association, vol. 10(4), pages 537-585, December.
    18. Lakonishok, Josef & Vermaelen, Theo, 1983. " Tax Reform and Ex-Dividend Day Behavior," Journal of Finance, American Finance Association, vol. 38(4), pages 1157-1179, September.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Andersson, Fredrik NG, 2016. "A Blessing in Disguise? Banking Crises and Institutional Change," World Development, Elsevier, vol. 83(C), pages 135-147.
    2. Masciandaro, Donato & Passarelli, Francesco, 2013. "Financial systemic risk: Taxation or regulation?," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 587-596.
    3. Jin Cheng & Meixing Dai & Frédéric Dufourt, 2016. "Banking Crisis, Moral Hazard and Fiscal Policy Responses," Working Papers of BETA 2016-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:cfswop:201112. 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: (ZBW - German National Library of Economics). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.