WHO SHOULD REGULATE FINANCIAL INSTITUTIONS?
Author: Booth P.
Source: Economic Affairs, Volume 23, Number 3, September 2003 , pp. 28-34(7)
Publisher: Blackwell Publishing
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Abstract:
Financial market transactions involve complex decisions and significant amounts of information have to be processed by consumers. Economists often call for statutory regulation to overcome so-called information asymmetries. However, the market will generally develop sophisticated institutions that are able to deal with such problems in financial markets. It is important that regulators do not impede the development of such institutions. The liberal market structure may not look like the market structures in many textbook models of so-called perfect markets. However, the structure may well be efficient and welfare enhancing.Document Type: Research article
DOI: 10.1111/1468-0270.00427
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