Redesigning Financial Regulation: The Politics of Enforcement

Redesigning Financial Regulation maps the policy response to corporate scandal to adjudicate whether the reforms adopted provide a panacea or merely a psychological placebo. It achieves this by drilling down into the foundations of the wider institutional architecture. It highlights the critical importance of organizational culture, operational discretion and enforcement proclivity in determining the scope and direction of regulatory innovation.

The book evaluates how changes to enforcement patterns impact on both the form and function of corporate governance. Can changes to the enforcement firmament be traced to coherent reappraisal? Conversely, do they merely represent crisis management devoid of overarching strategic purpose, with reflexive muscularity driven by largely inchoate public demands for legalistic accountability? Is the retreat to formal legal sanction conditioned by the need to instill confidence in the regulator, the narrow legal framework or wider societal norms? How does one avoid or, at the least, mitigate the risk that application of increased authority will lead, if misapplied, to decreased legitimacy through regulatory overreach? Given the critical importance of the capital markets in the United States to international regulatory policy, this book provides an essential map to ascertain whether, and if so, how, convergence can help instill confidence in the integrity of global markets.