The Rush to Re-Regulate

Economists' Voice, July 2008

Reg-Markets Center Related Publication 08-06

6 Pages Posted: 28 Jul 2008 Last revised: 23 Oct 2008

See all articles by Robert W. Hahn

Robert W. Hahn

Technology Policy Institute; University of Oxford, Smith School

Peter Passell

Milken Institute

Date Written: July 25, 2008

Abstract

With Wall Street still reeling from the mortgage meltdown, the Federal Reserve now seemingly committed to rescuing big investment banks "too complex to fail," and the U.S. Treasury proposing a top-to-bottom reorganization of financial regulation, pieties about the virtues of unfettered markets now seem hollow. Tighter oversight of financial markets, reversing a trend that began in the 1970s with the end of fixed commissions on the U.S. stock exchanges, is thus almost certainly in the cards.

However, a little perspective is in order: re-regulation could have unintended consequences, bolstering the power of well-organized interest groups, reducing access to capital and undermining America's competitive position in the huge and growing global market for financial services. Hence the wisdom in pausing to remember both how easy it is to fall into bad regulation, and how hard it is to dig out.

Suggested Citation

Hahn, Robert W. and Passell, Peter, The Rush to Re-Regulate (July 25, 2008). Economists' Voice, July 2008, Reg-Markets Center Related Publication 08-06, Available at SSRN: https://ssrn.com/abstract=1176943

Robert W. Hahn (Contact Author)

Technology Policy Institute ( email )

1401 Eye St. NW
Suite 505
Washington, DC 20005
United States

University of Oxford, Smith School ( email )

Oxford
United Kingdom

Peter Passell

Milken Institute ( email )

1250 Fourth Street
Santa Monica, CA 90401
United States

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