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Delegation and the regulation of U.S. financial markets
Ist Teil von
European Journal of Political Economy, 2021-12, Vol.70, p.102058, Article 102058
Ort / Verlag
Amsterdam: Elsevier B.V
Erscheinungsjahr
2021
Link zum Volltext
Quelle
PAIS Index
Beschreibungen/Notizen
We analyze the institutional determinants of U.S. financial market regulation with a general model of the policy-making process in which legislators delegate authority to regulate financial risk at both the firm and systemic levels. The model explains changes in U.S. financial regulation leading up to the financial crisis. We test the predictions of the general model with a novel, comprehensive data set of financial regulatory laws enacted specifically between 1950 and 2009. The theoretical and empirical analysis finds that economic and political factors impact Congress’ decision to delegate regulatory authority to executive agencies, which in turn impacts the stringency of financial market regulation, and our estimation results indicate that political factors may have been stronger and resulted in inefficiencies.
•We analyze the institutional determinants of U.S. financial market regulation.•We develop a general model of the policy-making process in which legislators delegate authority to regulate financial risk at both the firm and systemic levels.•We test the predictions of the general model with a novel, comprehensive data set of financial regulatory laws enacted specifically between 1950 and 2009.•We highlight the economic and political factors that shaped U.S. financial regulation before the financial crisis in 2008.