Weaknesses of Financial Market Regulation
Applied Economics and Finance, Vol. 5, No. 2; March 2018
9 Pages Posted: 1 May 2023
Date Written: April 21, 2018
In this paper we examine the extent newer developments affect the economic processes of the market and put financial markets at risk. We also analyze if the financial market regulations are sufficient to limit the systemic risk they cause. The biggest Shortcoming of the recent reforms to the stabilization of the financial system, such as Basel III and the American Dodd Frank Act, is that they increase the capital requirements rather than the causes of the increased risk. It would generally be better to forbid risky and complex financial products than to further increase regulation complexity and the capital requirements as in Basel III and the American Dodd Frank Act.
Keywords: derivatives, financial market regulation, ratings, value at risk, financial crisis, Basel III, Dodd Frank Act
JEL Classification: F55, G13, Q11, Q31
Suggested Citation: Suggested Citation