Arguments for and against Regulation

Abstract

In this chapter we present arguments for and against regulation in general and financial regulation in particular. Arguments for regulation may come in response to arguments against deregulation, and vice versa. This is why arguments for and against regulation are lumped together rather than separated, and this is why there may be some overlapping in the arguments. We reach the conclusion that corruption is (or should be) the main justification for financial regulation and that it is related to other justifications for regulation. For example, it is argued that corruption and greed can cause financial instability, which is typically considered to be the main objective of financial regulation.