Law Commons^™

Stilling The Pendulum: Regulatory, Supervisory, And Structural Approaches, Lev Menand

Faculty Scholarship

Financial regulation is often described as a swinging pendulum. A crisis occurs, and some number of years are spent crafting reforms to prevent another crisis from striking. Unfortunately, all too aware of the enormous costs of the recent disruption, policymakers go too far, stifling salutary financial activity and slowing economic growth. As memories fade, policymakers become increasingly focused on the costs of regulation. Stability is taken for granted, and restrictions are loosened. Markets stay stable and retrenchment continues. Regrettably, however, policymakers err again, and to our collective shock and horror, another crisis hits and the cycle repeats.

If this model …

If It Ain't Broke, Don't Fix It, Kathryn Judge

Faculty Scholarship

A prescription is only as good as the diagnosis on which it is based. This is just as true in finance as it is in medicine. And, in Hal Scott's assessment, the reforms adopted in the wake of the 2007-09 financial crisis ("Crisis") are based on a fundamental misunderstanding of the reasons for that crisis. The future is accordingly bleak.