Restructuring Regulation and Financial Institutions

Financial markets are among the most highly-regulated markets in the world. Nevertheless, financial crises still occur -- witness the U.S. savings-and-loan fiasco of the late 1980s and early 1990s, and the Mexican and East Asian financial implosions of 1994 and 1997. What role does regulation play in stabilizing -- or destabilizing -- financial markets? "Restructuring Regulation and Financial Institutions" answers this question with incisive analyses of financial market regulation in the United States.

The ramifications of financial regulation in the United States extend far beyond the nation's borders. World financial markets are undergoing dramatic change, driven by the rapid development and deployment of new technology that enables information -- and money -- to travel farther, faster. However, a Byzantine array of regulatory structures in the international arena hinder the development of efficient global financial markets. Policy makers around the world are attempting to address the issues by emulating the financial markets of the United States.

This book presents 10 papers that examine in-depth the primary aspects of U.S. financial market regulation, including:

* Banks
* Securities markets
* Pension policies and mutual funds
* Derivatives
* Life insurance company investments
* Government sponsored enterprises
* Systemic risk

Each paper considers how regulation enhances or impedes the efficiency of a particular financial sector, and is followed by comments by two or three noted experts. The result of this approach is a wealth of useful information that may be applied by policy makers contemplating the restructuring of regulations and financial institutions.

The contributors to this volume are distinguished economists, many of whom have careers not just in business, government, or academia, but have held influential positions in all three. Such varied backgrounds enable the contributors to offer remarkable insights based on the best of theory and practice.

Never before has understanding the workings of U.S. financial market regulation been so important to the development of world financial markets. Policy makers around the globe will find that "Restructuring Regulation and Financial Institutions" offers a cogent assessment of the contemporary regulatory environment in U.S. financial markets, and a blueprint for action in evolving global financial markets.

James R. Barth is Lowder Eminent Scholar in Finance at Auburn University and Senior Finance Fellow at the Milken Institute. He has held positions as chief economist of the Office of Thrift Supervision and of the Federal Home Loan Bank Board. Barth has testified before congressional committees on financial-institution and deposit-insurance issues, and has been a visiting consultant at the World Bank. He is the author of "The Great Savings and Loan Debacle," and has published more than 100 articles in professional journals and books. Dr. Barth received his Ph.D. in economics from Ohio State University.

R. Dan Brumbaugh Jr. is a Senior Fellow at the Milken Institute. He has testified before congressional committees on financial-institution matters, consulted for financial-service companies, and served as president and chief executive officer of Independence Savings and Loan from 1986 to 1987. Brumbaugh is the author of "The Collapse of Federally Insured Depositories: The Savings and Loans as Precursor" and of "Thrifts Under Seige: Restoring Order to American Banking." He is coauthor of the forthcoming book, "The Role of Banks in Global Financial Markets" (with James R. Barth and Glenn Yago). Dr. Brumbaugh received his Ph.D. in economics from George Washington University.

Glenn Yago is Director of Capital Studies for the Milken Institute. Formerly, he was Director of the Center for Capital Studies at the City University of New York, which he founded. He has served as consultant to the New York State Governor's Office, as well as to the governments of Bolivia, Hungary, and Israel. Yago also served as adviser and consultant to the White House Conference on Small Business, Small Business Administration, Competitiveness Policy Council, and Department of Commerce. In addition, he has consulted widely in the private sector. He is the author of three books, numerous academic articles, and articles for the financial press. Dr. Yago earned his Ph.D. at the University of Wisconsin.