Systemic Regulators’ Accountability to Parliaments: Advantages for Stability of Global Financial Markets

RESPONSES TO THE 'REFORMING FINANCIAL MARKETS' CONSULTATION, HM Treasury, ed., London: HM Treasury

12 Pages Posted: 1 Nov 2009 Last revised: 12 Jan 2010

See all articles by Nicholas Dorn

Nicholas Dorn

Institute of Advanced Legal Studies, University of London

Date Written: September 30, 2009

Abstract

This response to the 2009 UK White Paper on ‘Reforming Financial Markets’ argues for stronger democratic oversight of regulators and for regulatory diversity in order to reduce ‘market herding’ and the consequent systemic risks. In the context of hitherto weak democratic accountability and political challenges, international networking of regulators and those they regulate has resulted in convergence of regulatory thinking and standards - creating groupthink, common ‘blind spots’ and systemic vulnerability. The antidote, regulatory diversity, would correspond to the strategy of re-politicisation of financial market regulation, and democratic steering of regulatory agencies, displacing the currently dominant notion of financial market regulation as a purely technical, expert, ‘insider’ discourse. If it is too much of a paradox for policy-makers and market participants that international cooperation in pursuit of global stability must include making space for some regulatory diversity, then we may expect re-plays of recent stressful events.

Keywords: Financial markets, Regulation, Systemic stability/risk, Convergence/diversity, Democratic oversight

JEL Classification: A14, D81, F3, G15, G21, G38, H41, K22, K42

Suggested Citation

Dorn, Nicholas, Systemic Regulators’ Accountability to Parliaments: Advantages for Stability of Global Financial Markets (September 30, 2009). RESPONSES TO THE 'REFORMING FINANCIAL MARKETS' CONSULTATION, HM Treasury, ed., London: HM Treasury, Available at SSRN: https://ssrn.com/abstract=1497505 or http://dx.doi.org/10.2139/ssrn.1497505

Nicholas Dorn (Contact Author)

Institute of Advanced Legal Studies, University of London

Charles Clore House
17 Russell Square
London, WC1B 5DR
United Kingdom

HOME PAGE: http://ials.sas.ac.uk/about/staff/staffres.asp

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