Future of Financial Regulation

The Future of Financial Regulation is an edited collection of papers presented at a major conference at the University of Glasgow in spring 2009, co-sponsored by the Economic and Social Research Council World Economy and Finance Programme and the the Australian Research Council Governance Research Network. It draws together a variety of different perspectives on the international financial crisis which began in August 2007 and later turned into a more widespread economic crisis following the collapse of Lehman Brothers in the autumn of 2008. Spring 2009 was in many respects the nadir since valuations in financial markets had reached their low point and crisis management rather than regulatory reform was the main focus of attention. The conference and book were deliberately framed as an attempt to re-focus attention from the former to the latter. The first part of the book focuses on the context of the crisis, discussing the general characteristics of financial crises and the specific influences that were at work this time round. The second part focuses more specifically on regulatory techniques and practices implicated in the crisis, noting in particular an over-reliance on the capacity of regulators and financial institutions to manage risk and on the capacity of markets to self-correct. The third part focuses on the role of governance and ethics in the crisis and in particular the need for a common ethical framework to underpin governance practices and to provide greater clarity in the design of accountability mechanisms. The final part focuses on the trajectory of regulatory reform, noting the considerable potential for change as a result of the role of the state in the rescue and recuperation of the financial system and stressing the need for fundamental re-appraisal of business and regulatory models.

Introduction: The Future of Financial Regulation Iain MacNeil and Justin O'Brien 1. Adam Smith's Dinner Charles Sampford 2. US Mortgage Markets: A Tale of Self-correcting Markets, Parallel Lives and Other People's Money Robin Paul Malloy 3. The Current Financial Crisis and the Economic Impact of Future Regulatory Reform Ray Barrell, Ian Hurst and Simon Kirby 4. Financial Engineering or Legal Engineering? Legal Work, Legal Integrity and the Banking Crisis Doreen McBarnet 5. The Future of Financial Regulation: The Role of the Courts Jeffrey B Golden 6. The Financial Crisis: Regulatory Failure or Systems Failure? Paddy Ireland 7. Beyond 'Light Touch'Regulation of British Banks after the Financial Crisis Roman Tomasic 8. What Next for Risk-based Financial Regulation? Joanna Gray 9. Risk Control Strategies: An Assessment in the Context of the Credit Crisis Iain MacNeil 10. Revisiting the Lender of Last Resort—The Role of the Bank of England Andrew Campbell and Rosa Lastra 11. The Global Credit Crisis and Regulatory Reform George A Walker 12. What Future for Disclosure as a Regulatory Technique? Lessons from Behavioural Decision Theory and the Global Financial Crisis Emilios Avgouleas 13. Credit Crisis Solutions: Risk Symmetric Criteria for the Reconstruction of Socially Fair Asset-backed Securities Joseph Tanega 14. 'Corporate Governance' an Oxymoron? The Role of Corporate Governance in the Current Banking Crisis Blanaid Clarke 15. Board Composition and Female Non-executive Directors Sally Wheeler 16. Has the Financial Crisis Revealed the Concept of the 'Responsible Owner' to be a Myth? Charlotte Villiers 17. The Institutional Investor's Role in 'Responsible Ownership' Frank Curtis, Ida Levine and James Browning 18. Trust and Transparency: The Need for Early Warning Howard Adelman 19. Regulation, Ethics and Collective Investments Pamela F Hanrahan 20. Critical Voices:Widening the Regulatory Conversation Werner J Jeanrond 21. Dealing Fairly with the Costs to the Poor of the Global Financial Crisis Christian Barry and Matt Peterson 22. Professions, Integrity and the Regulatory Relationship: Defending and Reconceptualising Principles-based Regulation and Associational Democracy Ken McPhail 23. Financial Services Providers, Reputation and the Virtuous Triangle Seumas Miller 24. Toward A 'Responsible' Future: Reframing and Reforming the Governance of Financial Markets Melvin J Dubnick 25. Re-regulatuing Wall Street: Substantive Change or the Politics of Symbolism Revisited? Justin O'Brien 26. Banking Crisis: Regulation and Supervision Kern Alexander 27. Macro-prudential Regulation Avinash Persaud 28. The Regulatory Cycle: From Boom to Bust Jeremy Cooper