A Brief History of Regulations Regarding Financial Markets in the United States: 1789 to 2009

Alejandro Komai and Gary Richardson

No 17443, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the United States today, the system of financial regulation is complex and fragmented. Responsibility to regulate the financial services industry is split between about a dozen federal agencies, hundreds of state agencies, and numerous industry-sponsored self-governing associations. Regulatory jurisdictions often overlap, so that most financial firms report to multiple regulators; but gaps exist in the supervisory structure, so that some firms report to few, and at times, no regulator. The overlapping jumble of standards; laws; and federal, state, and private jurisdictions can confuse even the most sophisticated student of the system. This article explains how that confusion arose. The story begins with the Constitutional Convention and the foundation of our nation. Our founding fathers fragmented authority over financial markets between federal and state governments. That legacy survives today, complicating efforts to create a financial system that can function effectively during the twenty-first century.

JEL-codes: G01 G2 G21 G22 G28 N2 N21 N22 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-his and nep-reg
Note: DAE
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Citations: View citations in EconPapers (19)

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