Cost-Benefit Analysis as a Framework for Financial Regulation
25 Pages Posted: 18 Apr 2014
Date Written: February 16, 2014
Should Congress enact a formal cost-benefit analysis requirement for financial regulation? I survey the nature of costs and benefits of financial regulation, both “macro” regulation designed to stop crises and “micro” regulation of products, markets, and institutions. Although I find that financial regulation often grossly violates cost-benefit tests, the nature of its costs and benefits means that financial regulation is not likely to be much improved by adding a formalized cost-benefit procedure.
Keywords: cost-benefit, benefit-cost, financial regulation
JEL Classification: G28, G38, D61
Suggested Citation: Suggested Citation