Contrasting Worldviews at Bank and Securities Market Regulators

30 Pages Posted: 14 Sep 2019

See all articles by Mark J. Flannery

Mark J. Flannery

University of Florida - Department of Finance, Insurance and Real Estate

Date Written: September 5, 2019

Abstract

Bank and securities regulators operate with different attitudes about the appropriate regulation of financial institutions and markets. Bank regulators’ prudential oversight protects depositors from worrying about the repayment of their bank claims. In contrast, securities market regulators tend to presume that security markets (almost) always clear quickly at prices close to the asset’s fundamental value. These regulators seek to assure full disclosure of information, which facilitates active securities trading. In the United States, the SEC’s investor protection duties are tailored to the financial sophistication of individual investors.

Keywords: financial regulation, banks, security markets

JEL Classification: G18, G21, G23

Suggested Citation

Flannery, Mark Jeffrey, Contrasting Worldviews at Bank and Securities Market Regulators (September 5, 2019). Available at SSRN: https://ssrn.com/abstract=3448798 or http://dx.doi.org/10.2139/ssrn.3448798

Mark Jeffrey Flannery (Contact Author)

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States
352-392-3184 (Phone)
352-392-0103 (Fax)

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