Contrasting Worldviews at Bank and Securities Market Regulators
30 Pages Posted: 14 Sep 2019
Date Written: September 5, 2019
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: Suggested Citation