Study on relations between financial innovation and financial regulation

2013 ◽  
Author(s):  
Fang Zhou ◽  
Xu Xiangdong
Keyword(s):  
Financial Regulation ◽  
Financial Innovation

scholarly journals A Rational Regulatory Strategy for Governing Financial Innovation

2017 ◽  
Vol 8 (4) ◽  
pp. 743-765 ◽  
Author(s):  
Iris H-Y CHIU
Keyword(s):  
Financial Regulation ◽  
Regulatory Policy ◽  
Financial Innovation ◽  
Current Approach ◽  
Market Failures ◽  
Regulatory Oversight ◽  
Financial Innovations ◽  
Regulatory Frameworks ◽  
Regulatory Strategy ◽  
The Uk

AbstractModern financial regulation has predominantly been economically-driven,1 progressing from addressing market failures to making markets more competitive and work better.2 The UK Financial Conduct Authority is expressly mandated to pursue regulatory objectives that maintain market integrity and protect consumers (addressing market failures) and to promote competition (making markets work better).3 Both the FCA and its sister regulator, the Prudential Regulation Authority (for banks), have recently adopted innovative regulatory initiatives to promote technologically-driven innovation, aimed at making markets work better. These initiatives are also a response to the recent explosion of technologically-led financial innovation outside of the regulatory perimeter.In promoting financial innovation, we argue that the regulators have insufficiently focused on the need to govern financial innovation more generally. Although this concern may seem premature, the regulatory innovations are increasingly extending the perimeter for regulatory oversight of financial innovations. As the regulatory innovations have the potential to develop into more mature regulatory frameworks for governing financial innovation, we argue that regulators should manage the risks of their current approach and develop a regulatory strategy framework for balancing regulatory objectives and developing regulatory policy. We propose a framework anchored in rationality, consistency and accountability in governing financial innovation.

Corporate Governance for Complex Cryptocurrencies?

2019 ◽  
pp. 140-166 ◽  
Author(s):  
Philipp Hacker
Keyword(s):  
Corporate Governance ◽  
Complex Systems ◽  
Case Studies ◽  
Complexity Theory ◽  
Financial Regulation ◽  
Financial Innovation ◽  
Governance Framework ◽  
Blockchain Technology ◽  
Formal Equality ◽  
Initial Coin Offerings

Cryptocurrencies such as Bitcoin or Ethereum are gaining ground not only as alternative modes of payment but also as platforms for financial innovation, particularly through token sales or initial coin offerings (‘ICOs’). All of these ventures are based on decentralized, permissionless blockchain technology, distinguished by their openness to, and the formal equality of, participants. However, recent cryptocurrency crises have shown that these architectures lack robust governance frameworks and are therefore prone to patterns of re-centralization. They are informally dominated by coalitions of powerful players within the cryptocurrency ecosystem who may violate basic rules of the blockchain community without accountability or sanction. This chapter first suggests that cryptocurrency and token-based ecosystems can be fruitfully analysed as complex systems that have been studied for decades in complexity theory and have recently gained prominence in financial regulation, too. It applies these insights to three key case studies: the Bitcoin Hard Fork of 2013; the Ethereum hard fork of 2016, following the DAO hack; and the ongoing Bitcoin scaling debate. Second, the chapter argues that complexity-induced uncertainty can be reduced, and elements of stability and order strengthened, by adapting a corporate governance framework to blockchain-based organizations: cryptocurrencies, and decentralized applications built on top of them via token sales. The resulting ‘comply-or-explain’ approach combines transparency and accountability with the necessary flexibility that allows blockchain developers to continue to experiment for the sake of innovation. Eventually, however, the coordination of these activities may necessitate the establishment of a self-regulatory institution.

Co-Creation for the Reduction of Uncertainty in Financial Governance: The Case of Monetary Authority of Singapore.

2019 ◽  
Vol 19 (2) ◽  
pp. 60-80
Author(s):  
Olga Mikheeva ◽  
Piret Tõnurist
Keyword(s):  
Closed System ◽  
Financial Regulation ◽  
Financial Innovation ◽  
Financial Sector ◽  
Monetary Authority ◽  
Regulation And Supervision ◽  
New Organizational Forms ◽  
Financial Governance ◽  
Reduction Of Uncertainty ◽  
Insight Into

Traditionally financial governance has been perceived and studied as a closed system. Yet, increasing sophistication of technology facilitates the emergence of new organizational forms of collaboration between the state and corporate actors. The study argues that co-creation becomes the way for public sector to mitigate new types of uncertainties, coming from increasing technological sophistication of the financial sector. Thus, new insights can be gained from looking at co-creation in financial governance, which is a unique setting for co-creation as state’s partners are large and capable corporate organizations, especially in regards to financial innovation. Such an approach also brings new insight into co-production literature. To exemplify the argument, a closer look at how co-creation has been effectively applied by the Monetary Authority of Singapore in financial regulation and supervision as well as in policies related to promotion of the financial sector is provided.  Keywords: financial governance, co-creation, uncertainty, financial innovation, Singapore

scholarly journals Innovation-Framing Regulation

2013 ◽  
Vol 649 (1) ◽  
pp. 76-97 ◽  
Author(s):  
Cristie Ford
Keyword(s):  
Private Sector ◽  
Financial Regulation ◽  
Financial Innovation ◽  
Regulatory Interactions ◽  
Regulatory Design ◽  
Nuanced Understanding ◽  
Derivatives Markets

This article provides insights into the effective regulation of private sector innovation. It coins a term—“innovation-framing regulation”—to describe a particular quality of much of financial regulation in the recent era. It sketches a particular financial innovation (securitization and the marketing of securitized assets on derivatives markets), and describes three regulatory interactions having to do with that innovation. I identify three key assumptions that are ripe for re-evaluation: the notion that private sector innovation is beneficial, virtually by definition; the assumption that the regulatory moment is the crucial moment in regulatory design; and the belief that regulation somehow sits outside innovation and can be untouched by it. I argue that effective regulation of private sector innovation requires a clearer and more nuanced understanding of innovation, and engagement with the normative choices underpinning innovation-framing regulation.

Difficulties of the Financial Reform in the USA

2013 ◽  
pp. 147-158
Author(s):  
V. Kulakova
Keyword(s):  
Economic Policy ◽  
Consumer Protection ◽  
Financial Regulation ◽  
Financial Reform ◽  
Wall Street ◽  
Political Sciences ◽  
Consumer Protection Act ◽  
The Usa ◽  
Major Factors ◽  
International Financial Regulation

We study the reform of financial regulation initiated by the Dodd—Frank Wall Street Reform and Consumer Protection Act of 2010. Major factors impeding Obama’s financial and economic policy are explored, including institutional difficulties, party warfare, lobbyism, and systemic inconsistencies of international financial regulation. We also examine challenges that are being faced by economic and political sciences due to the changes in financial regulation and also assess the level of radicality of the financial reform.

Basel III: In quest for criteria and scenarios of the banking regulation reform advancement

2016 ◽  
pp. 77-93 ◽  
Author(s):  
E. Dzhagityan
Keyword(s):  
Financial Regulation ◽  
Cost Optimization ◽  
Spillover Effect ◽  
Regulatory Reform ◽  
Banking Regulation ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Eurasian Economic Union ◽  
Downward Pressure ◽  
Crisis Recovery

The article looks into the spillover effect of the sweeping overhaul of financial regulation, also known as Basel III, for credit institutions. We found that new standards of capital adequacy will inevitably put downward pressure on ROE that in turn will further diminish post-crisis recovery of the banking industry. Under these circumstances, resilience of systemically important banks could be maintained through cost optimization, repricing, and return to homogeneity of their operating models, while application of macroprudential regulation by embedding it into new regulatory paradigm would minimize the effect of risk multiplication at micro level. Based on the research we develop recommendations for financial regulatory reform in Russia and for shaping integrated banking regulation in the Eurasian Economic Union (EAEU).

Sign in / Sign up

Export Citation Format

Share Document