nach oben

Erschienen in:

2019 | OriginalPaper | Buchkapitel

1. Persistent Issues with Financial Regulation

verfasst von : Anil Hira, Norbert Gaillard, Theodore H. Cohn

Erschienen in: The Failure of Financial Regulation

Verlag: Springer International Publishing

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

Persistent issues with financial regulation preceded and continue after the 2008 global financial crisis. Immediate reactions to restore liquidity and provide fiscal stimulus rescued Western economies. However, they did not address root causes of the crash. We demonstrate that issues such as regulatory capture and moral hazard were recognised in the US banking system as far back as the late nineteenth century, and that ensuing reforms were inadequate and sometimes reversed. Financial innovation and globalisation have led to evolving and complex capital markets, leaving regulation behind. Financial instability helps to foster anti-globalisation, populist, and protectionist movements. This chapter advocates that adequate financial reforms are needed to address persistent issues, restore liberal capitalism, and reduce nationalism.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Nächstes Kapitel Financial Regulation and Monetary PolicyMonetary policy: The Spectre of Government Failure

We contrast liberal capitalism and finance capitalism. The two systems have many features in common (with respect to property rights, free price system, free trade, etc.). However, in finance capitalism, the role and the influence of financial institutions are so disproportionate that they tend to affect and even dominate the interests of other economic sectors and taxpayers.

See https://www.cftc.gov/sites/default/files/opa/speeches/opaborn-33.htm and http://www.washingtonpost.com/wp-dyn/content/article/2009/05/25/AR2009052502108.html [accessed Aug. 13, 2018].

In 2016, Jacques De Larosière, Managing Director of the International Monetary Fund (IMF) during 1978–1987, explained that the collapse of the Bretton Woods system had had incalculable negative consequences on the world economy. See https://www.odilejacob.fr/catalogue/sciences-humaines/economie-et-finance/cinquante-ans-de-crises-financieres_9782738134028.php

Authors’ calculations based on nber.org and measuringworth.com

It is worth noting that the development of electronic currencies and internet-based trading accelerated financial innovation.

The FSB is a reformed version of the Financial Stability Forum, but with a more formal charter and a small staff, to organise basic transparency and liquidity standards.

Davies and Turner are both ex-chairman of the UK’s Financial Services Authority.

Müller (2016) describes populists as being critical of elites, “anti-pluralist,” and advocating identity politics. See http://www.upenn.edu/pennpress/book/15615.html

Acharya, Viral V., Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence J. White. 2011. Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance. Princeton: Princeton University Press.

Alesina, Alberto, Omar Barbiero, Carlo Favero, Francesco Giavazzi, and Matteo Paradisi. 2015. Austerity in 2009–2013. Economic Policy. 30(83): 383–437.

Aloui, Riadh, Mohamed Safoune Ben Aïssa, and Duc Khuong Nguyen. 2011. Global Financial Crisis, Extreme Interdependences, and Contagion Effects: The Role of Economic Structure?, Journal of Banking & Finance. 35(1): 130–141.CrossRef

Aslund, Anders and Simeon Djankov. 2017. Europe’s Growth Challenge. Oxford and New York City: Oxford University Press.

Benmelech, Efraim, and Jennifer Dlugosz, 2009. The Credit Rating Crisis. NBER Working Paper No. 15045. Washington: NBER.

Blyth, Mark. 2002. Great Transformations. Cambridge and New York City: Cambridge University Press.

Bookstaber, Richard. 2007. A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation. New York City: Wiley.

Calomiris, Charles. 1998. The IMF’s Imprudent Role as Lender of Last Resort. Cato Journal. 17(3): 275–294.

Cecchetti, Stephen G. and Enisse Kharroubi, 2015. Why Does Financial Sector Growth Crowd Out Real Economic Growth? BIS Working Paper No. 490. February.

Cerny, Philip G. 1997. Paradoxes of the Competition State: The Dynamics of Political Globalization. Government and Opposition. 32(2): 251–274.

Claassen, Rutger. 2015. Financial Crisis and the Ethics of Moral Hazard. Social Theory and Practice. 41(3): 527–551.CrossRef

Cohen, Benjamin J. 1982. Balance-of-Payments Financing: Evolution of a Regime. International Organization. 36(2): 457–478.

Cohen, Benjamin J. 2008. The International Monetary System: Diffusion and Ambiguity. International Affairs. 84(3): 455–470.CrossRef

Cohen, Benjamin J. 2009. Sovereign Wealth Funds and National Security: The Great Tradeoff. International Affairs. 85(4): 713–731.CrossRef

Cohn, Theodore H. 2016. Global Political Economy: Theory and Practice, 7th ed. New York: Routledge.CrossRef

Coleman, William D. 1996. Financial Services, Globalization and Domestic Policy Change. International Political Economy Series. New York: Palgrave Macmillan.

Cornett, Marcia Millon, Jamie John McNutt, Philip E. Strahan, and Hassan Tehranian. 2011. Liquidity Risk Management and Credit Supply in the Financial Crisis. Journal of Financial Economics. 101(2): 297–312.CrossRef

Corsetti, Giancarlo, Paolo Pesenti, and Nouriel Roubini. 1999. What Caused the Asian Currency and Financial Crisis? Japan and the World Economy. 11(3): 305–373.CrossRef

Crotty, James. 2009. Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’. Cambridge Journal of Economics. 33(4): 563–580.CrossRef

Davies, Howard. 2015. Can Financial Markets Be Controlled? New York City: Polity.

De Larosière, Jacques. 2016. Cinquante ans de crises financières. Paris: Odile Jacob.

Dowd, Kevin. 2009. Moral Hazard and the Financial Crisis. Cato Journal. 29(1):141–166.

Duca, John V. 2017. The Great Depression versus the Great Recession in the U.S.: How Fiscal, Monetary, and Financial Policies Compare. Journal of Economic Dynamics and Control. 81: 50–64.CrossRef

Financial Stability Board. 2017. OTC Derivatives Market Reforms Twelfth Progress Report on Implementation.

Foroohar, Rana. 2016. Makers and Takers: The Rise of Finance and the Fall of American Business. New York: Crown Business.

Frieden, Jeffry A. 2015. Currency Politics: The Political Economy of Exchange Rate Policy. Princeton and Oxford: Princeton University Press.CrossRef

Friedman, Milton and Anna Jacobson Schwartz. 1963. A Monetary History of the United States, Princeton: Princeton University Press.

Gaillard, Norbert J. 2011. A Century of Sovereign Ratings. New York: Springer.

Goldbach, Roman. 2015. Global Governance and Regulatory Failure: The Political Economy of Banking. International Political Economy Series. Basingstoke (UK): Palgrave Macmillan.

Golub, Stephen, Ayse Kaya, and Michael Reay. 2015. What Were They Thinking? The Federal Reserve in the Run-up to the 2008 Financial Crisis. Review of International Political Economy. 22(4): 657–692.CrossRef

Graafland, Johan J. and Bert W. van de Ven. 2011. The Credit Crisis and the Moral Responsibility of Professionals in Finance. Journal of Business Ethics. 103(4): 605–619.CrossRef

Grossman, Richard S. 1992. Deposit Insurance, Regulation, and Moral Hazard in the Thrift Industry: Evidence from the 1930’s. American Economic Review. 82(4): 800–821.

Guttmann, Robert. 2009. Asset Bubbles, Debt Deflation, and Global Imbalances. International Journal of Political Economy. 38(2): 46–69.CrossRef

Haldane, Andrew G. 2012. The Dog and the Frisbee. Speech delivered at the Federal Reserve Bank of Kansas City’s 366th Economic Policy Symposium, “The Changing Policy Landscape”. Jackson Hole, Wyoming, August 31.

Hasen, Richard. 2016. Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections. Yale: Yale University Press.

Helleiner, Eric. 2014. The Status Quo Crisis. Oxford and New York City: Oxford University Press.CrossRef

Hendrickson, J.M. 2011. Regulation and Instability in US Commercial Banking: A History of Crises. New York City: Palgrave Macmillan.CrossRef

Hill, Claire. 1996. Securitization: A Low-Cost Sweetener for Lemons. Washington University Law Quarterly. 74(4): 1061–1120.

Hira, Anil. 2019. The Great Disruption: Explaining the Forces Behind Trump, Brexit and Le Pen (tentative title).

Hira, Anil. 2013. Irrational Exuberance: An Evolutionary Perspective on the Underlying Causes of the Financial Crisis. Intereconomics: Review of European Economic Policy. 48(2): 116–123.CrossRef

Independent Commission on Banking. 2011. Final Report – Recommendations. UK Banking Commission.

Keynes, John M. 1936. The General Theory of Employment, Interest, and Money. New York: Harcourt, Brace & World.

Keys, Benjamin J., Tanmoy Mukherjee, Amit Seru, and Vikrant Vig. 2010. Did Securitization Lead to Lax Screening? Evidence from Subprime Loans. Quarterly Journal of Economics. 125(1): 307–362.

Kindleberger, Charles P. [1978] 2005. Manias, Panics and Crashes: A History of Financial Crises. New York City: Palgrave Macmillan.

Kindleberger, Charles P. [1973] 2013. The World in Depression 1929–1939. Berkeley: University of California Press.

Krugman, Paul. 2012. End This Depression Now! New York City: W. W. Norton.

Lall, Ranjit. 2012. From Failure to Failure: The Politics of International Banking Regulation. Review of International Political Economy. 19(4): 609–638.CrossRef

Liikanen, Erkki. 2012. High-level Expert Group on Reforming the Structure of the EU Banking Sector, Chaired by Erkki Liikanen. Final Report. Brussels, October 2.

Longstaff, Francis A. 2010. The Subprime Credit Crisis and Contagion in Financial Markets. Journal of Financial Economics. 97(3): 436–450.CrossRef

Mayer, Martin. 1993. Nightmare on Wall Street: Salomon Brothers and the Corruption of the Marketplace. New York City: Simon & Schuster.

Mian, Atif and Amir Sufi. 2009. The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis. Quarterly Journal of Economics. 124(4): 1449–1496.CrossRef

Mian, Atif and Amir Sufi, 2014. House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again. Chicago: University of Chicago Press.CrossRef

Moschella, Manuela. 2010. Governing Risk: The IMF and Global Financial Crises. International Political Economy Series. Basingstoke (UK): Palgrave Macmillan.

Müller, Jan-Werner. 2016. What Is Populism? Philadelphia: University of Pennsylvania Press.

Nielsen, Richard P. 2010. High-Leverage Finance Capitalism, the Economic Crisis, Structurally Related Ethics Issues, and Potential Reforms. Business Ethics Quarterly. 20(2): 299–330.CrossRef

Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Belknap Press.CrossRef

Polanyi, Karl. 1965. The Great Transformation. Boston, MA: Beacon Press.

Rappeport, Alan and Emily Flitter. 2018. Congress Approves First Big Dodd-Frank Rollback. New York Times. May 22.

Reinhart, Carmen, and Kenneth Rogoff. 2009. This Time is Different: Eight Centuries of Financial Folly. Princeton: Princeton University Press.CrossRef

Ricardo, David. [1817] 1996. Principles of Political Economy and Taxation. Amherst, NY: Prometheus Books.

Rockoff, Hugh. 2000. Banking and Finance, 1789–1914, 643–684. In Stanley Engerman. The Cambridge Economic History of the United States, Vol. II. New York City: Cambridge University Press.

Roemer, John E. 2012. Ideology, Social Ethos, and the Financial Crisis. Journal of Ethics. 16(3): 273–303.CrossRef

Ruggie, John G. 1983. International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order, 195–231. In Stephen D. Krasner (Ed.). International Regimes. Ithaca, NY: Cornell University Press.

Sharman, J.C. 2017. Illicit Global Wealth Chains after the Financial Crisis: Micro-States and an Unusual Suspect. Review of International Political Economy. 24(1): 30–55.CrossRef

Silber, William J. 2007. When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America’s Monetary Supremacy. Princeton: Princeton University Press.CrossRef

Sinclair, Timothy J. 2010. Round Up the Usual Suspects: Blame and the Subprime Crisis. New Political Economy. 15(1): 91–107.CrossRef

Smith, Adam. [1759] 2002. The Theory of Moral Sentiments. Cambridge and New York City: Cambridge University Press.

Smith, Adam. [1776] 1999. The Wealth of Nations. London: Penguin.

Stiglitz, Joseph. 2012. The Price of Inequality. New York City and London: W. W. Norton.

Stock, James H. and Mark W. Watson. 2003. Has the Business Cycle Changed and Why?, in NBER Macroeconomics Annual 2002. Cambridge, MA: MIT Press. Vol. 17: 159–218.

Thiemann, Matthias. 2014. In the Shadow of Basel: How Competitive Politics Bred the Crisis. Review of International Political Economy. 21(6): 1203–1239.CrossRef

Turner, Adair. 2016. Between Debt and the Devil – Money, Credit, and Fixing Global Finance. Princeton: Princeton University Press.CrossRef

Van Zon, Hans. 2016. Globalized Finance and Varieties of Capitalism. New York: Palgrave Macmillan.

Wilmarth, Jr., Arthur E. 2010. Reforming Financial Regulation to Address the Too-Big-to-Fail Problem. Brooklyn Journal of International Law. 35(3): 707–783.

Yi-chong, Xu, and Gawdat Bahgat (Eds.). 2010. The Political Economy of Sovereign Wealth Funds. International Political Economy Series. Basingstoke (UK): Palgrave Macmillan.

Titel: Persistent Issues with Financial Regulation
verfasst von: Anil Hira
Norbert Gaillard
Theodore H. Cohn
Verlag: Springer International Publishing
Buch: The Failure of Financial Regulation
Print ISBN: 978-3-030-05679-7

Electronic ISBN: 978-3-030-05680-3

Copyright-Jahr: 2019
DOI: https://doi.org/10.1007/978-3-030-05680-3_1

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Premium Partner