Regulatory Reform

One lesson we have learned from the crisis is the need for more effective regulation. We are working with regulators on improved safeguards for the global financial system.

• Ending “too big to fail”: Taxpayers should not be protecting the shareholders and bondholders of even the most systemically important financial firms. Instead, these firms should be required to structure themselves so that they can be recapitalized without taxpayer money, and before local problems can spiral into a systemic crisis.

• Consistency: Regulators should require that all assets across financial institutions be similarly valued. Within each financial firm, there needs to be greater consistency and rigor in the way assets are valued and accounted for. Firms should no longer be able to move risk around to areas where it will be less rigorously monitored or more generously valued.

• More “dynamic regulation”: Across the board, the regulatory system should be both nimble and strong enough to identify and constrain excesses in markets, before they can threaten the broader economy.

• Market structure: Recently, there has been substantial debate among regulators, legislators and the media on certain market structure issues. We continue to work with our regulators and legislators as they assess new trading developments to evaluate their effect on market efficiency and available market information. Read more about market structure including Alternative Trading Systems, Naked Sponsored Access and Securities Lending and Short Sales. 

Read more about about our research on Effective Regulation