Post-Crisis Banking Regulation: Evolution of economic thinking as it happened on Vox

How were financial regulators, the people best placed to assess the susceptibilities of the financial system to reckless risk taking and wealth imbalances, caught so much off guard by the Global Financial Crisis? As the catastrophe unfolded, academics struggled to comprehend events and produce coherent explanations of the phenomenon. Explanations took form only to be replaced by competing theories within months. Eventually a consensus was reached that the Crisis was the result of excessive deregulation, and could be resolved only by more intense regulation. But outside of the US, away from the Glass-Steagall Act, the replacement of sweeping restrictions with micro-regulation has failed to solve the problem.

A viable answer to the issues arising from financial regulation requires a more nuanced debate, and this is exactly what has occurred on VoxEU. Leading economists have analysed every aspect of the banking regulation debate, and their conclusions have shaped the regulation agenda.

This eBook collects some of the best Vox columns on financial and banking regulation, covering a wide range of topics from the fundamentals of regulation to bank capital and the broader concerns of potential policy responses. The columns chosen for this eBook represent the scope and complexity of the regulatory debate as it played out on VoxEU. While the contributing authors’ conclusions differ, they collectively convey the intricacies of the policy problem and the challenges ahead for policymakers. Over the course of this debate taking place, our understanding of how best to pursue safe financial regulation that also fosters economic growth has improved immeasurably.

The eBook is available here.