Macro-Prudential Financial Regulation: Panacea or Placebo?

Amsterdam Law Forum, Vol. 1, No. 3, 2009

6 Pages Posted: 3 Jun 2009 Last revised: 20 Nov 2009

See all articles by Dan Awrey

Dan Awrey

University of Oxford, Faculty of Law; European Corporate Governance Institute

Date Written: April 24, 2009

Abstract

This article examines the potential efficacy of macro-prudential financial regulation as a mechanism for preventing future systemic crises. I argue that the potential efficacy of macro-prudential financial regulation will be undermined by (1) the complexity of financial markets and our incomplete understanding of them, (2) the shortcomings of our quantitative models for measuring and managing risk, (3) the need for internal and cross-border consensus, and (4) the bluntness of available macro-economic regulatory mechanisms in terms of their ability to actively manage risk within financial markets.

Keywords: financial crisis, macro-economic, risk, markets, dan, awrey, macro-prudential

Suggested Citation

Awrey, Dan, Macro-Prudential Financial Regulation: Panacea or Placebo? (April 24, 2009). Amsterdam Law Forum, Vol. 1, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=1410014

Dan Awrey (Contact Author)

University of Oxford, Faculty of Law ( email )

St. Cross Building
St. Cross Road
Oxford, OX1 3UL
United Kingdom

European Corporate Governance Institute ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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