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Keynote & Chapman Dialogue Address: Ex Ante Versus Ex Post Approaches to Financial Regulation

14 Pages Posted: 26 Jan 2011 Last revised: 28 Dec 2014

Steven L. Schwarcz

Duke University School of Law

Date Written: January 31, 2011

Abstract

Ideal financial regulation would work ex ante, to prevent financial failures. Once a failure occurs, there may already be economic damage, and it may be difficult to stop the failure from spreading and becoming systemic. The reality, though, is that preventing financial failures should be only one role for regulators. Even an optimal prophylactic regulatory regime cannot anticipate and prevent every failure. This paper, which formed my Chapman Dialogue Address at Chapman University School of Law and the keynote speech at Chapman Law Review’s 2011 Symposium on the Future of Financial Regulation, attempts to contrast fundamental differences between ex ante and ex post financial regulation. It also illustrates how ex post approaches can, and arguably should, supplement ex ante approaches as part of a comprehensive financial regulatory framework.

Keywords: financial crisis, systemic risk, financial regulation

Suggested Citation

Schwarcz, Steven L., Keynote & Chapman Dialogue Address: Ex Ante Versus Ex Post Approaches to Financial Regulation (January 31, 2011). Chapman Law Review, Vol. 15, p. 258, 2011. Available at SSRN: https://ssrn.com/abstract=1748007 or http://dx.doi.org/10.2139/ssrn.1748007

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7060 (Phone)
919-613-7231 (Fax)

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