Unmet Duties in Managing Financial Safety Nets

What is it about?

The paper develops a set of minimal ethical criteria by which to judge the performance of financial regulators.Crisis-management protocols in use in the US and Europe today neglect these duties in an inherently elitist ways. By focusing on constraining balance sheets rather than disciplining responsible executives, regulatory cultures unwisely and unduly favor the individual financiers whose recklessness eventually brought on the crisis at the expense of other citizens.

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Why is it important?

Although this focus has failed repeatedly to stop the aggressive pursuit of tail risk in the past, post-crisis reform continues to focus on loophole-laden balance-sheet constraints and corporate-level fines,