A literature review on complexity of financial regulation

dc.contributorAalto Universityen
dc.contributorAalto-yliopistofi
dc.contributor.advisorVälimäki, Juuso
dc.contributor.authorTang, Shengquan
dc.contributor.departmentTaloustieteen laitosfi
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2020-02-09T17:01:10Z
dc.date.available2020-02-09T17:01:10Z
dc.date.issued2019
dc.description.abstractSince the financial crisis, which finally aroused the public vigilance against inefficient regulation, there have been remarkable literatures on over-complexity and several rounds of reform in financial regulation. Yet, some relevant questions still remain unanswered. This paper, in the form of literature review, summaries the most critical problems on complexity and the efforts have been made so far to solve them. Started from Introducing the importance of complexity through regulation and crises, the complexity of financial regulation is presented by time first, showing complexity significantly expanded after Basel II. Next several comparisons between complex and simple regulatory rules reveal the its incapability. Then incentives behind complexity, three economic theories, and three typical methods of quantitative analysis are discussed sequentially, implying over-complexity is self-filling and detrimental. And it is imperative for regulators to find a simple and transparent replacement. While some plausible solutions have been tried, the validity of most is limited, among which market-based approaches seems to be most promising. Looking further, complexity might mitigate in the form of regulatory rules, it, however, will pervade the whole regulation framework by more reliance on supervisory discretion.en
dc.format.extent64+0
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/42997
dc.identifier.urnURN:NBN:fi:aalto-202002092071
dc.language.isoenen
dc.locationP1 Ifi
dc.programmeEconomicsen
dc.subject.keywordcomplexityen
dc.subject.keywordfinancial regulationen
dc.subject.keywordBasel Accorden
dc.subject.keywordsimplificationen
dc.titleA literature review on complexity of financial regulationen
dc.typeG2 Pro gradu, diplomityöfi
dc.type.ontasotMaster's thesisen
dc.type.ontasotMaisterin opinnäytefi
local.aalto.electroniconlyyes
local.aalto.openaccessyes

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