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Financial Stability Rearticulated: Institutional Reform, Post-Crisis Governance, and the New Regulatory Landscape in the United States

18 Pages Posted: 5 May 2014 Last revised: 9 Mar 2015

David S. Bieri

Virginia Polytechnic Institute & State University - School of Public and International Affairs (SPIA); Virginia Polytechnic Institute & State University - Department of Economics

Date Written: February 2015

Abstract

The Consumer Financial Protection Bureau (CFPB) is a regulatory agency of the United States government with a mandate to make "consumer financial products and services work for Americans". A direct response to the recent financial crisis, the creation of the CFPB in 2010 marks an important departure from the U.S. regulatory tradition of decentralized agencies whereby the institutional locus of financial oversight depended on the precise nature of the legal structure of and business activities pursued by individual financial intermediaries. In its mandate and institutional structure, the CFPB unifies both "micro-prudential" and "macro-prudential" principles of financial regulation to enhance overall financial stability. From an historical perspective, the creation of the CFPB does not change the regulatory landscape to the same extent as did the creation of the Federal Reserve after the Panic of 1907 or the creation of the FDIC after the 1933 Banking Crisis. At the same time, however, the CFPB represents a unique historical shift in the policy focus of U.S. financial regulation away from bank stability and monetary policy to consumer protection.

Keywords: Financial stability, CFPB, FDIC, financial regulation, financialization

JEL Classification: G18, G28, E42, R1

Suggested Citation

Bieri, David S., Financial Stability Rearticulated: Institutional Reform, Post-Crisis Governance, and the New Regulatory Landscape in the United States (February 2015). Available at SSRN: https://ssrn.com/abstract=2432209 or http://dx.doi.org/10.2139/ssrn.2432209

David S. Bieri (Contact Author)

Virginia Polytechnic Institute & State University - School of Public and International Affairs (SPIA) ( email )

United States

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

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