Less Regulation Means Greater Complexity: How Looser Bank Regulation Allowed Faster Growth, Greater Complexity and Contributed to Absent Management in Banking

Christian Dinesen ()
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Christian Dinesen: Dinesen Associates Ltd.

Chapter Chapter 4 in Absent Management in Banking, 2020, pp 51-73 from Springer

Abstract: Abstract Regulation was important for the Medici with a ban on usury and for the Rothschilds with a ban on joint stock company banks. The devastating Great Depression in the 1930s resulted in significantly tightened regulation including the separation of commercial deposit-taking and investment banks in the United States. Combined with international currency regulation after Second World War this tightening regulation resulted in the only longer period in modern times with no banking crisis. From the early 1970s, continuously loosening of regulation allowed banks to grow and diversify. Some banks grew so rapidly and expanded so aggressively that they became overly complex and thereby unmanageable.

Keywords: Regulation; Crisis; Loosening; Growth; Complexity (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-35824-2_4

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DOI: 10.1007/978-3-030-35824-2_4

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