(Thursday, 19th May 2016)
Title : The Iron Law of Financial Regulation
The Iron Law of Financial Regulation is a one-way ratchet of increasingly, complex, opaque, and inapt regulation that follows from the cumulation of regulation implementing crisis-driven legislative directives. After introducing the problematic of the Iron Law due to the interaction of the political economy of crisis-driven legislation in the dynamic environment of financial institutions and markets, with illustrations from the global financial crisis of 2008-09, I will discuss two mechanisms for mitigating the effect of the Iron Law, to get financial regulation back on track: sunsetting crisis-driven legislation and its implementing regulations, that is, time-delimiting the duration of such legislation and regulation to force a legislative reassessment; and facilitating regulatory experimentation, to better inform the quality of regulation.
Bibliographical references :
Must read reference : Romano, Roberta (2014) &Regulating in the Dark and a Postscript Assessment of the Iron Law of Financial Regulation,& Hofstra Law Review: Vol. 43: Iss. 1, Article 2.