Principles of Financial Regulation

"An essential building-block for preventing another financial crisis, or at least minimizing the consequences, is an in-depth understanding of how the global financial services regulatory system does (and does not) work. Principles of Financial Regulation provides a uniquely insightful and comprehensive analysis of this crucial subject. It should be a required read for everyone who makes, implements, or is affected by financial services regulation." H. Rodgin Cohen, Senior Chairman, Sullivan & Cromwell LLP "In a dazzling exploration of the theoretical and empirical foundations of financial regulation, a team of leading academic experts offer an encyclopedic overview rich in institutional detail and global perspective, probing the causes of the financial crisis and the challenges that lie ahead. An essential resource for students, scholars, practitioners, or policy makers." Howell E. Jackson, James S. Reid, Jr, Professor of Law, Harvard Law School "The authors' premise is that the financial crisis arose in significant part because of intellectual and regulatory silos that divided securities markets from banking; they offer a unified field theory of how financial markets function and how they should be regulated. The book is full of original and important ideas, and should be an invaluable companion for legal academics in teaching and scholarship as well as for economists who want to understand the regulatory system as set in an economic framework." Geoffrey P. Miller, Stuyvesant P. Comfort Professor of Law and Director, Center for Financial Institutions, New York University School of Law "Financial regulation is too-important-to-fail but it failed catastrophically in 2008. Financial regulation in future will be robust only if built on sound principles of law and economics allied to practical understanding of markets and institutions. This book - the product of a great team effort 6 lays out those principles. It illuminates and demystifies a field of public policy that, as we learned the hard way, matters for us all." Sir John Vickers, Professor of Economics and Warden of AII Souls College, University of Oxford; Chairman of the UK's Independent Commission on Banking, 2010-11 The financial crisis of 2007-9 revealed serious fadings in the regulation of financial institutions and markets, and prompted a fundamental reconsideration of the design of financial regulation. As the financial system has become ever-more complex and interconnected, the pace of evolution continues to accelerate. It is now clear that regulation must focus on the financial system as a whole, but this poses significant challenges for regulators. Principles of Financial Regulation describes how to address those challenges. Examining the subject from a holistic and multidisciplinary perspective, Principles of Financial Regulation considers the underlying pollues and the objectives of regulation by drawing on economics, finance, and law methodologies. The volume examines regulation in a purposive and dynamic way by framing the book in terms of what the financial system does, rather than what financial regulation is. By analysing specific regulatory measures, the book provides readers the opportunity to assess regulatory choices on specific policy issues and encourages critical reflection on the design of regulation. John Armour, Dan Awrey, Paul Davies, Luca Enriques, Jeffrey N. Gordon, Colin Mayer and Jennifer Payne.