Chapter Three: Challenges to Regulating the Banking Sector
Published: June 15, 2021
Amit Seru offers recommendations to reduce the challenges facing the banking sector and answers frequently asked questions about regulations. What are regulators supposed to do when new entities go beyond the bounds of what was previously regulated? Is countercyclical regulation effective?
This lecture was recorded in the fall of 2019, before the COVID-19 pandemic.
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Discussion Questions
- Why are regulations important for the banking sector?
- What are the policy tools that central banks have to guarantee financial stability?
Additional Resources
- Listen as Amit Seru discusses modern financial intermediation. Available here.
- Listen as Amit Seru talks about the growth of shadow banks, the increased regulatory burden faced by traditional banks, and the financial technology adopted by shadow banks. Available here.
- Read “Regulation of the Mortgage Market Must Consider Shadow Banks” by Amit Seru. Available here.