Shareholder Liability: A New (Old) Way of Thinking about Financial Regulation

Summary:
Page Title:Shareholder Liability: A New (Old) Way of Thinking about Financial Regulation – C.D. Howe Institute
Article Title:Shareholder Liability: A New (Old) Way of Thinking about Financial Regulation
URL:https://cdhowe.org/publication/shareholder-liability-new-old-way-thinking-about-financial-regulation/
Published Date:February 19, 2014
Accessed Date:February 15, 2025

In the wake of a series of crises, international and domestic financial regulation has become highly complex and prescriptive, but doesn’t address the fundamental issues behind the crises, according to a report released today by the C.D. Howe Institute.  In “Shareholder Liability: A New (Old) Way of Thinking about Financial Regulation,” author Finn Poschmann finds the regulations ignore history and human behavior. He recommends greater reliance on an incentives-based approach for financial institutions, which shares the risks among bond buyers, shareholders and depositors, as a better backstop to financial stability.

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