Post-2008 financial regulatory changes largely have been a failure. They have produced high compliance costs, while constructing regulatory mechanisms that are unlikely to achieve their intended objectives. Furthermore, financial regulation increasingly has adopted processes that are inconsistent with adherence to the rule of law, which not only threaten the fundamental norms on which are democracy is founded, but also undermine the effectiveness of regulation. the combination of high costs, ineffective mechanisms, and inappropriate processes reflects a neglect of the core principles that underlie successful financial regulation. This study reviews the shortcomings of current regulatory practice, identifies the principles that should guide our regulatory architecture, and suggests reforms that are consistent with those principles.


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