Jane D'Arista and Stephany Griffith–Jones
- Published in print:
- 2010
- Published Online:
- February 2010
- ISBN:
- 9780199578801
- eISBN:
- 9780191723285
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199578801.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Financial Economics
D'Arista and Griffith‐Jones stress the seeming contradiction that the more liberalized the financial system is, the greater the need for more effective regulation, to avoid massive and costly crises. ...
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D'Arista and Griffith‐Jones stress the seeming contradiction that the more liberalized the financial system is, the greater the need for more effective regulation, to avoid massive and costly crises. The chapter develops the two basic principles on which such future financial regulation should be based. The first principle is counter‐cyclicality. It aims at correcting the main manifestation of market failures in banking and financial markets: their boom‐bust nature. The key idea is that (forward‐looking) provisions and/or capital required should increase as risks are incurred, that is when loans grow more, and fall when loans expand less. The application of this principle in Spain and Portugal shows that it is possible to design simple rules to make it effective.Less
D'Arista and Griffith‐Jones stress the seeming contradiction that the more liberalized the financial system is, the greater the need for more effective regulation, to avoid massive and costly crises. The chapter develops the two basic principles on which such future financial regulation should be based. The first principle is counter‐cyclicality. It aims at correcting the main manifestation of market failures in banking and financial markets: their boom‐bust nature. The key idea is that (forward‐looking) provisions and/or capital required should increase as risks are incurred, that is when loans grow more, and fall when loans expand less. The application of this principle in Spain and Portugal shows that it is possible to design simple rules to make it effective.
R. Glenn Hubbard
- Published in print:
- 2011
- Published Online:
- August 2013
- ISBN:
- 9780262015615
- eISBN:
- 9780262295789
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262015615.003.0007
- Subject:
- Economics and Finance, Economic Systems
This chapter begins mapping out a path towards financial regulatory reform. Using the belief that the financial crisis is the result of a lack of effective regulation, the chapter examines several ...
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This chapter begins mapping out a path towards financial regulatory reform. Using the belief that the financial crisis is the result of a lack of effective regulation, the chapter examines several themes that have emerged: one is more effective regulation, second is an increase in transparency in the financial system, and a final one is the formation of a financial regulatory structure that will be capable of achieving these goals. The chapter tackles the severity of the crisis, citing the International Monetary Fund’s estimate of total near-term global losses on U.S. credit-related debt to be $2.7 trillion. The origin of this financial crisis is believed to have its foundations in risk, particularly the mispricing of risk. The chapter then states that a rapid response is important to sustaining economic recovery, and the harmonization of economies is important when seeking to resolve financial crises.Less
This chapter begins mapping out a path towards financial regulatory reform. Using the belief that the financial crisis is the result of a lack of effective regulation, the chapter examines several themes that have emerged: one is more effective regulation, second is an increase in transparency in the financial system, and a final one is the formation of a financial regulatory structure that will be capable of achieving these goals. The chapter tackles the severity of the crisis, citing the International Monetary Fund’s estimate of total near-term global losses on U.S. credit-related debt to be $2.7 trillion. The origin of this financial crisis is believed to have its foundations in risk, particularly the mispricing of risk. The chapter then states that a rapid response is important to sustaining economic recovery, and the harmonization of economies is important when seeking to resolve financial crises.
Joseph Stiglitz and Aaron Edlin (eds)
- Published in print:
- 2014
- Published Online:
- November 2015
- ISBN:
- 9780231160155
- eISBN:
- 9780231504324
- Item type:
- book
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231160155.001.0001
- Subject:
- Economics and Finance, Public and Welfare
The Economists’ Voice: Top Economists Take On Today’s Problems featured a core collection of accessible, timely essays on the challenges facing today’s global markets and financial institutions. This ...
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The Economists’ Voice: Top Economists Take On Today’s Problems featured a core collection of accessible, timely essays on the challenges facing today’s global markets and financial institutions. This book is the next installment in this series, gathering together the strongest essays published in The Economist’s Voice, a nonpartisan online journal, so that students and general readers can gain a deeper understanding of the financial developments shaping their world. The chapters tackle the plain economics and architecture of health care reform, its implications for society and the future of the health insurance industry, and the value of the health insurance subsidies and exchanges built into the law. The book considers the effects of financial regulatory reform, the possibilities for ratings reform, and the issue of limiting bankers’ pay. An objective examination of the financial crisis and bank bailouts results in two chapters on investment banking regulation after Bear Stearns and the positives and negatives of the Paulson/Bernanke bailout. The chapters weigh the merits of future rescues and suggest alternative strategies for addressing the next financial crisis. A final section examines a unique array of topics: the stability of pension security bonds; the value of a carbon tax, especially in fostering economic and environmental sustainability; the counterintuitive perils of net neutrality; the unforeseen consequences of government debt; the meaning of the Google book search settlement; and the unexploited possibilities for profit in NFL overtime games.Less
The Economists’ Voice: Top Economists Take On Today’s Problems featured a core collection of accessible, timely essays on the challenges facing today’s global markets and financial institutions. This book is the next installment in this series, gathering together the strongest essays published in The Economist’s Voice, a nonpartisan online journal, so that students and general readers can gain a deeper understanding of the financial developments shaping their world. The chapters tackle the plain economics and architecture of health care reform, its implications for society and the future of the health insurance industry, and the value of the health insurance subsidies and exchanges built into the law. The book considers the effects of financial regulatory reform, the possibilities for ratings reform, and the issue of limiting bankers’ pay. An objective examination of the financial crisis and bank bailouts results in two chapters on investment banking regulation after Bear Stearns and the positives and negatives of the Paulson/Bernanke bailout. The chapters weigh the merits of future rescues and suggest alternative strategies for addressing the next financial crisis. A final section examines a unique array of topics: the stability of pension security bonds; the value of a carbon tax, especially in fostering economic and environmental sustainability; the counterintuitive perils of net neutrality; the unforeseen consequences of government debt; the meaning of the Google book search settlement; and the unexploited possibilities for profit in NFL overtime games.
Arthur B. Laby
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9780199683772
- eISBN:
- 9780191763359
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199683772.003.0013
- Subject:
- Business and Management, Pensions and Pension Management
When buying stocks, bonds, mutual funds, and other securities, individuals seeking advice typically turn to broker-dealers or investment advisers before they invest. In many cases, brokers and ...
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When buying stocks, bonds, mutual funds, and other securities, individuals seeking advice typically turn to broker-dealers or investment advisers before they invest. In many cases, brokers and advisers perform similar functions but they are regulated differently under laws enacted during the Great Depression. Regulators are considering ways to harmonize the regulation of these professionals, but harmonization is fraught with difficulties. This chapter discusses the debate over harmonization and explains how the U.S. Securities and Exchange Commission, the courts, and Congress have responded. The chapter concludes with insights into considerations that will likely determine how the harmonization debate will be resolved.Less
When buying stocks, bonds, mutual funds, and other securities, individuals seeking advice typically turn to broker-dealers or investment advisers before they invest. In many cases, brokers and advisers perform similar functions but they are regulated differently under laws enacted during the Great Depression. Regulators are considering ways to harmonize the regulation of these professionals, but harmonization is fraught with difficulties. This chapter discusses the debate over harmonization and explains how the U.S. Securities and Exchange Commission, the courts, and Congress have responded. The chapter concludes with insights into considerations that will likely determine how the harmonization debate will be resolved.
Annelise Riles
- Published in print:
- 2011
- Published Online:
- February 2013
- ISBN:
- 9780226719320
- eISBN:
- 9780226719344
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226719344.003.0007
- Subject:
- Economics and Finance, Financial Economics
This chapter focuses on the implications of the ethnography for current debates about financial regulatory reform. It pulls forth the real-world examples presented in this book together to consider ...
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This chapter focuses on the implications of the ethnography for current debates about financial regulatory reform. It pulls forth the real-world examples presented in this book together to consider their implications for the limits of existing ways of thinking about regulation and governance, and the possibilities for imagining alternatives. This chapter shows how the techniques of private regulatory governance provide a little-noticed, less-glamorous, but ultimately highly effective and even potentially transformative alternative to most other current proposals to rebuild the “architecture” of global financial regulation. The ultimate goal is to shift the mood of crisis surrounding the regulation of the global financial system away from simple stories of good and bad apples, of villains and victims, cops and robbers, toward a more sophisticated public understanding of the techniques that make up private and public forms of governance.Less
This chapter focuses on the implications of the ethnography for current debates about financial regulatory reform. It pulls forth the real-world examples presented in this book together to consider their implications for the limits of existing ways of thinking about regulation and governance, and the possibilities for imagining alternatives. This chapter shows how the techniques of private regulatory governance provide a little-noticed, less-glamorous, but ultimately highly effective and even potentially transformative alternative to most other current proposals to rebuild the “architecture” of global financial regulation. The ultimate goal is to shift the mood of crisis surrounding the regulation of the global financial system away from simple stories of good and bad apples, of villains and victims, cops and robbers, toward a more sophisticated public understanding of the techniques that make up private and public forms of governance.
