Challenges for Regulatory Reform in the Finance Sector: Learnings from the Last Decade

Thomson Reuters
Publication Type:
Journal Article
Journal of Banking and Finance: Law and Practice, 2019, 30 (3), pp. 151 - 168
Issue Date:
Full metadata record
Over the last decade the finance sector has undergone significant scrutiny both globally and locally. Following the Global Financial Crisis, the G20 led a process of regulatory reform that had an impact internationally, however, the effectiveness of many of these reforms remains debatable. Scholarly experts have reviewed, assessed and critiqued the reform efforts yet this work is rarely used to inform new policy regimes. This article presents a systematic review of the academic literature on post-financial crisis regulatory reform with the aim of drawing out lessons for the future. It finds that financial regulation faces challenges at three levels: (1) at a structural or architectural level in terms of who regulates what; (2) at a processual level in terms of the style and mechanism of regulation; and (3) at the level of regulatory content, that is, the details of the rules or standards. In addition, regulatory effectiveness can be facilitated or hindered by: power and politics; blurred boundaries; and incorrect assumptions about behaviour. The article discusses these findings in the context of recent evidence of misbehaviour in the Australian finance sector.
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