Financial Sector Regulation

Financial sector regulation in this short-form links collection presents a special problem. It is undergoing rapid change especially on an international level away from traditional US models anchored in distinct and localized banking, insurance, commodities and capital markets, which shaped US financial sector regulation before World War II (yielding the Federal Reserve, SEC, CFTC, state level regulation in insurance and securities, etc.). The rapid current change reflects basic underlying developments in the international financial system at the level of the Bretton Woods institutions (for example, floating currency rates), changes or overlaps in markets and products particularly since 1980s deregulation (for example, the widespread dissemination of financial derivatives in both over-the-counter and exchange markets with the result that such products now straddle capital, banking, insurance and commodities markets), and technology (for example, transactions over the internet underminng the geographic reach of regulation). The reason we care about this in terms of corporate finance is that, in practice, the financial sector represents a regulated industry with the result that at the level of complex transactions like project finance there is typically a lurking question even at the structuring level, namely who and how many regulator(s) must be dealt with by the lawyers?

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