How Financial Oversight Failed & What it May Portend for the Future of Regulation

Richard Herring ()

Atlantic Economic Journal, 2010, vol. 38, issue 3, 265-282

Abstract: This paper analyzes the role that well-intentioned policies contributed to the crisis and increased its severity. It also examines the principal-agent problems in the public sector that enabled many of the principal-agent problems in the private sector often blamed for the crisis. The legacy of the crisis is a massive series of bailouts by public authorities in Europe and the United States that risked the equivalent of nearly one-fifth of world GDP in taxpayer funds. This moral hazard will lead to deeper and more frequent crises unless countered by a new approach to regulation that places greater emphasis on market discipline by creditors and counterparties. Copyright International Atlantic Economic Society 2010

Keywords: Regulation; Bail-outs; Regulation and principal/agent-problems (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:38:y:2010:i:3:p:265-282

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DOI: 10.1007/s11293-010-9237-z

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