Managing Risk in the Financial System
Show Less

Managing Risk in the Financial System

Edited by John Raymond LaBrosse, Rodrigo Olivares-Caminal and Dalvinder Singh

Managing Risk in the Financial System makes important and timely contributions to our knowledge and understanding of banking law, financial institution restructuring and related considerations, through the production of an innovative, international and interdisciplinary set of contributions which link together the law and policy issues surrounding systemic risk and crisis management.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 11: Firm Stability and System Stability: The Regulatory Delusion

Geoffrey Wood and Ali Kabiri


1 Geoffrey Wood with Ali Kabiri 11.1. INTRODUCTION When the regulators examine the grocery business in the UK they are invariably concerned with competition. Is one firm or another too dominant? Is it treating customers appropriately? How is it treating its suppliers and its small competitors? In short, is the industry competitive is always, in one form or another, the question that is being asked. Concern is often prompted by the (entirely inappropriate) test of market share. A question that is never asked is how robust a particular individual firm is. This is distinctly odd to anyone familiar with regulation in the financial sector. In the UK, a question that is always in regulators’ minds is how stable a particular firm is. Why is that not asked of firms in the grocery sector? Banking services are important, but so, after all, is the supply of food. Yet the regulators never worry about what would happen if, to take a wildly implausible example, Tesco were to fail overnight. Why is that question not asked? The answer is surely in two parts. First, and very important for the failing firm’s suppliers and employees, there is for such firms a well-established and well-tested insolvency regime. That regime has for many years worked well in the sense of enabling orderly winding up or selling on of insolvent businesses, and has done so within a time period which in most cases has no doubt been irritating but seldom literally intolerable. Second, there is no fear...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.