Český finanční a účetní časopis 2011(4):7-15 | DOI: 10.18267/j.cfuc.139

Regulatory Response to Financial Crisis - Some Questions

Petr Dvořák
Doc. Ing. Petr Dvořák, Ph.D. - docent; Katedra bankovnictví a pojišťovnictví, Fakulta financí a účetnictví,Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <dvorakp@vse.cz>.

Natural response to the financial crisis is mostly increased regulation. This was happened in history, as well as in the global financial crisis today. The reasons for this usually lie in the fact that the one of the main considered direct causes of the crisis is insufficient or incorrect regulation or only way to prevent certain problems just seems to be regulation. This paper reflects whether the new regulatory measures introduced in response to the causes and effects of the global financial crisis (increase capitalization of banks, regulation of minimum bank liquidity, regulation of rating agencies, deep transparency of OTC derivatives, in particular and settlement of OTC trades through a central counterparty) can effectively prevent similar problems in the future. The author believes that further deepening of detailed regulation is not the way that can ensure a stable banks and entire financial system in the longer term. On the contrary, he considers as much more promising way the so-called macroprudential regulation, which would be of course gradually putting even greater emphasis on individual institutions own responsibility.

Keywords: Regulation; Derivatives; Capital adequacy; Liquidity.
JEL classification: E5, G01

Published: December 1, 2011  Show citation

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Dvořák, P. (2011). Regulatory Response to Financial Crisis - Some Questions. Czech Financial and Accounting Journal, 2011(4), 7-15. doi: 10.18267/j.cfuc.139
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