What is Financial Regulation Trying to Achieve?
Hayek Society Journal, Vol. 9, 2011
9 Pages Posted: 30 Jan 2012
Date Written: September 23, 2011
The article deals with the goals at which legislators and administrative agencies aim when they regulate the financial markets.
After considering shortly the most commonly accepted goals of financial regulation, according to the mainstream opinion, both from an abstract and from a more practical point of view, the article relies then on some of Friedrich von Hayek's insights to question the legitimacy and efficacy of legislative intervention in the area of financial markets.
Contrasting the mainstream view with Hayek's alternative position, the article makes the case that the hayekian approach is more persuasive, provocatively concluding that the piles of regulation that try to discipline financial markets, more and more after the recent crisis, are very often irrelevant, and sometimes even a remedy worse than the evil.
Keywords: financial regulation, Hayek, state intervention in the economy, financial crisis
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