Several leading academics are calling for a new approach to financial regulation based on simple legal frameworks, rather than the current obsession with complex, detailed specifications. They set out their arguments in detail in the latest edition of the IEA’s journal Economic Affairs “Financial Regulation: the need for a revolution” (vol. 32, No.3).
Writing in today’s edition of The Times the same authors argue:
The public's objective is for a sustainable financial services industry. There is currently no debate on available ways to achieve that objective other than through massive regulatory intervention. There is little evidence that this is the only or best way to achieve this objective. Indeed, there is substantial evidence available that this approach will not be successful and that alternative routes may be preferable.
1. Financial regulation has run riot in recent years to the detriment of the industry and its customers. For example, last year alone there were 14,200 new banking regulations worldwide and the US Dodd Frank Act will contain around 30,000 pages of regulations.