Financial system/Addendum

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This addendum is a continuation of the article Financial system.


Regulatory structures

Four types of regulatory structure have been identified[1]:

  • The institutional approach, in which a firm’s legal status determines which regulator is tasked with overseeing its activity;
  • The functional approach, in which supervisory oversight is determined by the business that is being transacted by the entity so that each type of business activity has its own regulator;
  • The integrated approach, in which a single universal regulator conducts both safety and soundness oversight and conduct-of-business regulation for all the sectors of financial services business; and,
  • The twin peaks approach, in which one regulator performs safety and soundness supervision function and the other focuses on conduct-of-business regulation.


Reform agendas

Markets in Financial Instruments Directive[2] (EU) October 2007.

Report of the Financial Stability Forum[3] April 2008.

The G30 report[4] October 2008

The G20 summits November 2008 and April 2009.

Report of the Congressional Oversight Panel[5] (US) January 2009.

Report of the de Larosière Group[6] (EU) February 2009.

Federal Reserve Board proposals[7] (US) March 2009.

The Obama plan (US) June 2009 White Paper: Financial Regulatory Reform:[8]. Fact Sheets:Requiring Strong Supervision And Appropriate Regulation Of All Financial Firms[9]; Strengthening Regulation Of Core Markets And Market Infrastructure [10];Strengthening Consumer Protection[11]; Providing The Government With Tools To Effectively Manage Failing Institutions[12]; Improving International Regulatory Standards And Cooperation[13]

Treasury and Bank of England proposals [14][15] (UK) June 2009.

Council Conclusions on Strengthening EU financial supervision[16] (EU) 9th June 2009.

Sarbanes-Oxley Act, 2002 U.S. laws and regulations intended to protect against financial irregularity in public companies. (A response to major corporate failures that involved poor auditing, such as Enron and Worldcom).