Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Lessons From The Past Can Clarify Banking Crisis

14.11.2008
Stricter regulation of the financial services sector is likely to result from the latest upheaval in national and global markets. It is being demanded by politicians of all parties while the Financial Services Authority, which polices the sector in the UK, has announced that it is recruiting additional staff as part of a more stringent regulatory approach.

“The history of regulation is largely one of regulators trying to catch up after a crisis has arisen,” says Professor Catherine Schenk, from the World Economy and Finance Research Programme at the University of Glasgow.

She emphasises that while, regulatory changes are a familiar response to financial upheavals that does not guarantee their future effectiveness. “The experience of global crises shows that new guidelines tend to be aimed at the problems that caused the last crisis rather than anticipating the next source of weakness.”

During the current crisis, many commentators have called for more robust cross-border regulation of a banking system which has become ever more global in recent decades. But Professor Schenk, whose research has included examining attempts at regulating international financial markets in the decades since the Second World War, points to long-standing and continuing obstacles which face drives for greater multilateral regulation of international financial markets. These include:

•The difficulties of tracking international financial flows and complex transactions;

•fears of pushing markets to off-shore centres which would be more poorly regulated than the existing major national ones;

•lack of agreement between nations on the costs and benefits of greater global regulation;

•perceived threats to national sovereignty.

“In the past, attempts at collaborative supervision have most commonly come after a crisis when an international event has threatened national financial systems,” says Professor Schenk. “When a crisis recedes, however, so does the impetus for regulatory reform. Meanwhile financial institutions innovate in ways to evade the new rules aimed at controlling their activities and this can cause new dangers.”

“One obvious question is, will the sheer dramatic scale of this crisis strengthen the prospects for greater multilateral regulation succeeding this time?” Professor Schenk explains, “A lot will depend on the effects on the stock market and the wider economy. The extent to which far more people are now exposed to the stock market through pensions, ISA savings and in other ways is one of the main differences between what is happening today and the 1929 crash or the 1982 Latin American debt crisis.

“The financial sector is undoubtedly a very difficult and complex one to regulate. The current initiative, known as Basle II took 9 years to develop and has now been over-run by current events. I think much will now come down to how the regulators police the new regulations which will be developed, and to what extent different national regulatory regimes can succeed in creating and implementing common approaches and features.”

Danielle Moore | alfa
Further information:
http://www.esrcsocietytoday.ac.uk

More articles from Business and Finance:

nachricht Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik

nachricht RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: First evidence on the source of extragalactic particles

For the first time ever, scientists have determined the cosmic origin of highest-energy neutrinos. A research group led by IceCube scientist Elisa Resconi, spokesperson of the Collaborative Research Center SFB1258 at the Technical University of Munich (TUM), provides an important piece of evidence that the particles detected by the IceCube neutrino telescope at the South Pole originate from a galaxy four billion light-years away from Earth.

To rule out other origins with certainty, the team led by neutrino physicist Elisa Resconi from the Technical University of Munich and multi-wavelength...

Im Focus: Magnetic vortices: Two independent magnetic skyrmion phases discovered in a single material

For the first time a team of researchers have discovered two different phases of magnetic skyrmions in a single material. Physicists of the Technical Universities of Munich and Dresden and the University of Cologne can now better study and understand the properties of these magnetic structures, which are important for both basic research and applications.

Whirlpools are an everyday experience in a bath tub: When the water is drained a circular vortex is formed. Typically, such whirls are rather stable. Similar...

Im Focus: Breaking the bond: To take part or not?

Physicists working with Roland Wester at the University of Innsbruck have investigated if and how chemical reactions can be influenced by targeted vibrational excitation of the reactants. They were able to demonstrate that excitation with a laser beam does not affect the efficiency of a chemical exchange reaction and that the excited molecular group acts only as a spectator in the reaction.

A frequently used reaction in organic chemistry is nucleophilic substitution. It plays, for example, an important role in in the synthesis of new chemical...

Im Focus: New 2D Spectroscopy Methods

Optical spectroscopy allows investigating the energy structure and dynamic properties of complex quantum systems. Researchers from the University of Würzburg present two new approaches of coherent two-dimensional spectroscopy.

"Put an excitation into the system and observe how it evolves." According to physicist Professor Tobias Brixner, this is the credo of optical spectroscopy....

Im Focus: Chemical reactions in the light of ultrashort X-ray pulses from free-electron lasers

Ultra-short, high-intensity X-ray flashes open the door to the foundations of chemical reactions. Free-electron lasers generate these kinds of pulses, but there is a catch: the pulses vary in duration and energy. An international research team has now presented a solution: Using a ring of 16 detectors and a circularly polarized laser beam, they can determine both factors with attosecond accuracy.

Free-electron lasers (FELs) generate extremely short and intense X-ray flashes. Researchers can use these flashes to resolve structures with diameters on the...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Leading experts in Diabetes, Metabolism and Biomedical Engineering discuss Precision Medicine

13.07.2018 | Event News

Conference on Laser Polishing – LaP: Fine Tuning for Surfaces

12.07.2018 | Event News

11th European Wood-based Panel Symposium 2018: Meeting point for the wood-based materials industry

03.07.2018 | Event News

 
Latest News

Machine-learning predicted a superhard and high-energy-density tungsten nitride

18.07.2018 | Materials Sciences

NYSCF researchers develop novel bioengineering technique for personalized bone grafts

18.07.2018 | Life Sciences

Why might reading make myopic?

18.07.2018 | Health and Medicine

VideoLinks
Science & Research
Overview of more VideoLinks >>>