What is it about?
This paper addresses the need for mitigating information asymmetries - as well as highlights the rationales through which financial regulation plays vital roles in global markets which are impacted not only by information symmetries, but also evolving risks from complex trading financial instruments. Increased linkages as a result of the rise in financial conglomerates, have resulted from the blurring between the banking, insurance and securities sectors. Furthermore, the digital economy has revolutionized the approach to trading - and particularly trading platforms. It is therefore important to ascertain more defined standards in order to regulate more efficiently those financial instruments which are currently unaccounted for.
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Why is it important?
This is important given the recent confusing signals which impacted global financial markets as a result of the Federal Reserve's decision to cut federal funds rate - the first time since 2008. Whilst certain policies may not be clearly understood at the time, global developments - namely global growth indicators - as well as ongoing trade wars between major economies may also contribute as vital justifications for a monetary policy stance.
Perspectives
Even though central bank independence is important to fostering accountability, effective and timely coordination between the central bank, other financial and national supervisors/agencies , as well as government representatives (namely the Treasury), is also vital in achieving the goals and objectives of financial regulation.
Prof Marianne Ojo
Northwestern University
Read the Original
This page is a summary of: Central Bank Independence, Policies and Reforms: Addressing Political and Economic Linkages, SSRN Electronic Journal, Social Science Electronic Publishing,
DOI: 10.2139/ssrn.2405816.
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Resources
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