Systemic Risk, Regulation and Supervision. Reading Recent History: U.S. and European Approaches

The paper provides a summary overview of post-crisis macroeconomic and regulatory developments in the US and the EU. Financial de-regulation and re-regulation in advanced countries underwent broad common swings over the last century and especially in the financial globalization decades. Significant albeit subtle differences in normative details between countries still allow for regulation arbitrage and regulation gaming, further advantaging large financial institutions with respect to locally ‘connected’ finance. As extensive inequality is likely to increase systemic risks, the paper highlights a crucial, largely unaddressed issue in reforming finance within the so-called advanced countries – namely, how finance can contribute to providing inclusive growth.