Risk and regulatory reforms in the securities industry: a need for a paradigm shift? Online publication date: Sun, 03-Oct-2010
by Anastassios Gentzoglanis
International Journal of Financial Markets and Derivatives (IJFMD), Vol. 1, No. 4, 2010
Abstract: The recent worldwide developments in financial markets have ignited the debate about the best approach to regulation of the securities industries. Given that systemic risk reduction is getting into the realm of objectives of the regulatory agencies, new approaches to regulation are called for. Walsh (2008) proposes an alternative mechanism, dubbed institutional-based regulation, as a means of reducing systemic risk. Anand (2009) dispels Walsh's framework by arguing that it does not constitute a new regulatory model, but it is simply a variation of the rules-based regulation. I argue that Walsh's model, as it stands, cannot adequately reduce systemic risk. To do so, securities regulators need to shift paradigm and adopt a new one dubbed regulation by information. Under this paradigm, regulators could reduce systemic risk by becoming 'information providers' during the upward movement of the securities industries and revert back to the traditional rules- or principles-based regulation during protracted periods of equilibrium.
Online publication date: Sun, 03-Oct-2010
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Financial Markets and Derivatives (IJFMD):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org