Economic Themes (2013) 51 (4) 1, 627-644

THE ROLE OF FINANCIAL REGULATORS IN THE CONTEXT OF THE GLOBAL FINANCIAL CRISIS


Zoran Ćirović, Lana Janković

Abstract: The financial sector is one of the main driving forces of a country’s economic development and essentially important factor of its overall economic stability. However, when exposed to inadequate regulation, unstable market and underdeveloped institutions, the financial sector might become a root cause of financial crises and one of the main factors that contribute to destabilization of a national economy as a whole. As the global financial crisis set in, it became evident that a stronger role of the state and its institutions became necessity in order to restrain more efficiently the observed internal deficiencies in the market itself. In the aftermath of first wave of the financial crisis, many countries initiated legislative reforms, abandoning the then prevailing principle of financial deregulation. One of the main directions the reforms took was the establishment of new regulatory authorities and delegation of enhanced supervisory powers to existing market regulators.

Keywords:  financial crisis; financial markets; capital market regulators; regulation; post-crisis reforms

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