Innovation-Framing Regulation

Cristie Ford

The ANNALS of the American Academy of Political and Social Science, 2013, vol. 649, issue 1, 76-97

Abstract: This article provides insights into the effective regulation of private sector innovation. It coins a term—“innovation-framing regulation†—to describe a particular quality of much of financial regulation in the recent era. It sketches a particular financial innovation (securitization and the marketing of securitized assets on derivatives markets), and describes three regulatory interactions having to do with that innovation. I identify three key assumptions that are ripe for re-evaluation: the notion that private sector innovation is beneficial, virtually by definition; the assumption that the regulatory moment is the crucial moment in regulatory design; and the belief that regulation somehow sits outside innovation and can be untouched by it. I argue that effective regulation of private sector innovation requires a clearer and more nuanced understanding of innovation, and engagement with the normative choices underpinning innovation-framing regulation.

Keywords: regulatory design; innovation; financial crisis; Basel II; Asset-Backed Commercial Paper; Dodd-Frank Wall Street Reform and Consumer Protection Act; Volcker Rule (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:649:y:2013:i:1:p:76-97

DOI: 10.1177/0002716213489249

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