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Chapter Two: Why Financial Regulations Matter


Published: June 15, 2021

Financial regulations exist to protect consumers’ investments, as well as prevent financial fraud. Federal and state governments have many agencies in place that regulate and oversee financial markets and companies. While these agencies have explicit duties and responsibilities that allow them to work independently, they work together to accomplish similar objectives.

This lecture was recorded in the fall of 2019, before the COVID-19 pandemic.

Interested in attending the Hoover Institution Summer Policy Boot Camp? Click here for more information.

Discussion Questions

  1. Why are regulations important for the banking sector?
  2. 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.