Regulatory Failure and the Global Financial Crisis

Regulatory Failure and the Global Financial Crisis

An Australian Perspective

Edited by Mohamed Ariff, John H. Farrar and Ahmed M. Khalid

This fascinating book presents a lively discussion of key issues resulting from the recent financial crisis. The expert contributors explore why the global financial crisis occurred, how it destroyed wealth, triggered mass unemployment and created an unprecedented loss of control on employment, monetary policy and government budgets.

Chapter 9: The Work of IOSCO and the Financial Regulatory Framework

Jane Diplock

Subjects: economics and finance, financial economics and regulation


Jane Diplock 9.1 INTRODUCTION The topic of this chapter – the work of IOSCO and the financial regulatory framework – matters a great deal to the contributors to this volume, but its ramifications go so much wider. The results of the crisis touch those still unaware that financial markets matter to them and their lives, as well as those who believed so until recently – when they discovered that what happens in the markets can send out shock waves that engulf them and their families, their homes and their livelihoods. As a regulator, these people are one of my key concerns. We need them to invest in securities markets, and their confidence in the markets is key to the making of the market. We need to head market participants towards greater transparency, reduced conflicts of interest, and more focus on the interests of investors. It is not enough to insist only on compliance with the law. We also work to promote high standards of market conduct on the part of all participants. Only high standards will allow the woman on Sydney’s Bondi tram and the man on the Clapham omnibus to be confident enough in the rules of the game to invest in the securities market. Once upon a time, the game, and therefore the setting of its rules, was more or less confined to individual jurisdictions. That has changed forever. Financial markets are now global. Money moves across international borders with the click of a computer mouse. The systemic implications of what...

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