Regulation of Banking and Financial Markets [unknown]

Dirk Heremans, Alessio M. Pacces
Regulation and Economics   unpublished
The dynamic evolution of the financial system is stirring up the regulatory debate. Recent theoretical insights in the role of financial intermediaries and banks shed new light on the role of financial regulation. Information asymmetries, adverse selection and moral hazard problems help to explain the need for investors' protection and the occurrence of systemic crises that may endanger financial stability. Lender of last resort interventions and deposit insurance are to be complemented by
more » ... tive compatible capital adequacy rules in an efficient corporate governance perspective. The balance between market and government is shifting, replacing structural by prudential measures, eventually moving towards worldwide regulation.
doi:10.4337/9781782540465.00023 fatcat:p5whq3igzrh3ldw2sx4jirb4r4