Book Review: Guardians of Finance Making Regulators Work for Us
Journal of Applied Finance, Fall/Winter 2012, Volume 22, No.2
Posted: 11 Sep 2012
Date Written: 2012
Guardians of Finance is a rare book which addresses the question of where were the regulators, Guardians, when the financial crisis occurred in a clear and balanced manner. The Guardians have largely escaped criticism by cloaking themselves behind a convenient narrative. Under this view, the Guardians were powerless to stop the crisis which represented an accidental event. Furthermore, they allege if only granted additional powers, for example the Dodd Frank Act (DFA), future accidents would be eliminated. Even though it is difficult to envision what powers regulators lacked that could have stopped the crisis. The often blamed Glass-Steagall Act repeal is shown to be a red herring as the crisis occurred in countries which did not have a Glass-Steagall to repeal. This book, like their 2006 book Rethinking Bank Regulation: Till Angels Govern may be uncomfortable for both those on the right and left given its balance. The book, however, is not about blame, but about the accountability needed to achieve real progress. Essentially, you cannot learn if you do not understand.
Keywords: financial crisis, Glass-Steagall Act, Dodd Frank Act (DFA)
Suggested Citation: Suggested Citation