This book aims to unpack the complex economic relationships between law, asset price bubbles and financial regulation. The failure to understand these interactions has had severe consequences, as law has proven ill-equipped to prevent or mitigate financial crises caused by bubbles. Bubbles represent prolonged, but unsustainable booms in the price of assets, such as securities or real estate. They form due to herd behavior by investors and other economic feedback loops. These same feedback loops render financial regulations designed for normal market conditions ineffective or...
This book aims to unpack the complex economic relationships between law, asset price bubbles and financial regulation. The failure to understand these...
Financial regulation can fail when it is needed the most. The dynamics of asset price bubbles weaken financial regulation just as financial markets begin to overheat and the risk of crisis spikes. At the same time, the failure of financial regulations adds further fuel to a bubble.
This book examines the interaction of bubbles and financial regulation. It explores the ways in which bubbles lead to the failure of financial regulation by outlining five dynamics, which it collectively labels the "Regulatory Instability Hypothesis." .
The book concludes by outlining approaches to make...
Financial regulation can fail when it is needed the most. The dynamics of asset price bubbles weaken financial regulation just as financial markets...
