Good Regulation, Bad Regulation (eBook)

The Anatomy of Financial Regulation

Imad A. Moosa (Autor)

eBook Download: PDF

2016 | 2015
XIII, 247 Seiten
Palgrave Macmillan UK (Verlag)
978-1-137-44710-4 (ISBN)

Infos

In this book the author evaluates the benefits and shortcomings of specific types of financial regulation.

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Since the 2007 2008 global financial crisis, there has been much debate about the role of financial regulation and the causes of financial instability in the industry. Where studies commonly question the value of a regulated rather than free market , this book focuses on the differentiation of 'good regulation' and 'bad regulation'. This book highlights the need for financial regulation to combat corruption, and the integral link that exists between corruption and financial instability. The author evaluates the benefits and shortcomings of specific types of regulation, drawing on recent examples to illustrate each argument. The book presents compelling arguments for the regulation of leverage, liquidity, payday loans and securitisation; and debates the negative aspects of the regulation of short selling, and high-frequency trading, and of Basel-style banking regulation. The author argues that there is no free-market solution to financial instability, and rejects the idea of 'too big to fail'.

Autor

Imad Moosa is Professor of Finance at RMIT, Australia. He held previous appointments at Monash and La Trobe Universities, Australia, and the University of Sheffield, UK. Prior to working in academia he held professional positions at the International Monetary Fund and in investment banking. He has published 16 books and over 200 papers.

Inhalt

Cover 1
Contents 8
Preface and Acknowledgements 11
List of Abbreviations 12
1 Definition and Theories of Regulation 15
1.1 Definition of Regulation 15
1.2 Forms of Regulation 18
1.3 The Public Interest Theory of Regulation 21
1.4 The Capture Theory of Regulation 23
1.5 The Special Interest Groups Theory of Regulation 27
1.6 Concluding Remarks 28
2 Arguments for and against Regulation 30
2.1 Introduction 30
2.2 Avoiding Corporate Failure 31
2.3 Creature of the State 31
2.4 Market Failure 32
2.5 The Protection of Rights 34
2.6 Efficiency 34
2.7 Impeding Innovation 35
2.8 The Cost of Compliance 36
2.9 Circumvention of Regulation 37
2.10 Ineffectiveness 38
2.11 Corruption as a Justification for Financial Regulation 38
2.12 The Greed Game 42
2.13 Concluding Remarks 43
3 Regulation, Deregulation and Financial Crises 45
3.1 The Free-Market Doctrine 45
3.2 Free Banking and Financial Laissez-Faire 54
3.3 Regulation and Banking Efficiency: The Empirical Evidence 57
3.4 Deregulation as a Cause of Financial Crises 62
3.5 Concluding Remarks 69
4 Good Regulation: Payday Loans, Securitisation and Insider Trading 70
4.1 What is Good Regulation? 70
4.2 Payday Loans 71
4.3 Arguments for and against the Regulation of Payday Loans 73
4.4 Securitisation and Derivatives 76
4.5 Insider Trading 84
5 Good Regulation: Leverage and Liquidity 92
5.1 The Leverage Ratio: Why Does it Matter? 92
5.2 Leverage as a Cause of the Global Financial Crisis 95
5.3 The Basel 3 Leverage Ratio 97
5.4 Arguments for and against the Leverage Ratio 99
5.5 The Concept of Liquidity 101
5.6 The Role of Liquidity in the Global Financial Crisis 104
5.7 Arguments for the Regulation of Liquidity 108
6 Bad Regulation: Basel 1 and Basel 2 112
6.1 The Basel 1 Accord 112
6.2 From Basel 1 to Basel 2 118
6.3 A Critical Evaluation of Basel 2 120
6.4 Basel 2 and the Global Financial Crisis 131
6.5 Conclusion 133
7 Bad Regulation: Basel 2.5 and Basel 3 135
7.1 From Basel 2 to Basel 2.5 135
7.2 A Critique of Basel 2.5 138
7.3 Basel 2 to Basel 3 142
7.4 The Basel 3 Provisions 143
7.5 A Critique of Basel 3 146
7.6 The Verdict on Basel 3 and the Basel Culture 149
7.7 Conclusion 153
8 Bad Regulation: Short Selling 155
8.1 Introduction 155
8.2 Some Preliminary Remarks 156
8.3 The Past and Present of Short Selling 159
8.4 Arguments for Short Selling 162
8.5 Arguments against Short Selling 168
8.6 The Regulation of Short Selling: A Critique 174
8.7 Naked versus Covered Short Selling 179
8.8 Conclusion 181
9 Bad Regulation: High-Frequency Trading 182
9.1 Regulating the Unknown 182
9.2 What is HFT? 183
9.3 The Proclaimed Profitability of HFT 188
9.4 HFT as the Cause of the Flash Crash 193
9.5 Arguments against HFT 194
9.6 The Case for and against the Regulation of HFT 202
9.7 Conclusion 204
10 Bad Regulation: Too Big to Fail, Bail-Out and Bail-In 206
10.1 Introduction 206
10.2 The Concept of TBTF 207
10.3 Evolution of the TBTF Doctrine 208
10.4 Arguments for TBTF 210
10.5 Arguments against TBTF 212
10.6 Dealing with the Menace of TBTF 215
10.7 Bail-Out versus Bail-In 222
10.8 Conclusion 224
11 Concluding Remarks 226
11.1 Recapitulation 226
11.2 What is Good Regulation? 227
11.3 Corruption as a Cause of Instability and Crises 228
11.4 Banks Always Win 229
11.5 Taleb's Ten Commandments 230
11.6 Light at the End of the Tunnel? 232
References 234
Index 254

Produkt-Details

• Erscheint lt. Verlag: 12.1.2016
• Reihe/Serie: Palgrave Macmillan Studies in Banking and Financial Institutions
• Reihe/Serie: Palgrave Macmillan Studies in Banking and Financial Institutions
• Zusatzinfo: XIII, 247 p.
• Verlagsort: London
• Sprache: englisch
• Themenwelt: Technik
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Themenwelt: Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Unternehmensführung / Management
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre ► Finanzwissenschaft
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre ► Makroökonomie
• Schlagworte: Banking • Basel accords • Derivatives • Financial regulation • Insider Trading • Securitisation • Too big to fail • Trading
• ISBN-10: 1-137-44710-9 / 1137447109
• ISBN-13: 978-1-137-44710-4 / 9781137447104