The Four Methods of Financial System Regulation: An International Comparative Survey

(2015) 26 JBFLP 151

UWA School of Law Research Paper

23 Pages Posted: 5 Dec 2017 Last revised: 28 Jan 2018

See all articles by Andrew Schmulow

Andrew Schmulow

University of Wollongong, School of Law; Clarity Prudential Regulatory Consulting Pty Ltd; Oliver Schreiner School of Law; Centre for International Trade

Date Written: 2017

Abstract

This article provides a description of the four methods of financial system regulation currently in use internationally, with case studies illustrating each system. Analysis is provided of the strengths and weaknesses of each. Research indicates that the “Twin Peaks” system is superior to its peers.

However, this article also concludes, by reference to failings observed in “Twin Peaks” arrangements to date, that “Twin Peaks” alone is no panacea against financial crises, or market and consumer abuse. It is merely the best form of regulatory architecture. Other factors, such as the capacity and willingness of the regulators to discharge their mandate, even within a sound regulatory architecture, are as important to the success of financial system regulation, as evidenced by the failures in the United Kingdom around the time of the global financial crisis, and as evidenced by the success of the Monetary Authority of Singapore, despite Singapore’s sub-optimal regulatory structure.

Suggested Citation

Schmulow, Andrew, The Four Methods of Financial System Regulation: An International Comparative Survey (2017). (2015) 26 JBFLP 151, UWA School of Law Research Paper, Available at SSRN: https://ssrn.com/abstract=3082092

Andrew Schmulow (Contact Author)

University of Wollongong, School of Law ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

Clarity Prudential Regulatory Consulting Pty Ltd ( email )

Level 5, 306 Little Collins Street
Melbourne
Victoria, Victoria 3000
Australia

HOME PAGE: http://www.clarityprc.com.au

Oliver Schreiner School of Law ( email )

PBag X3, WITS
2050 Johannesburg
South Africa

Centre for International Trade ( email )

206 International Hall
Seoul 110-745, 110-745
Korea, Republic of (South Korea)

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