An institutional analysis of the social control of the financial services industry

Abstract

This study of the political economy of regulation of the financial services industry combines an explication of the evolution of the industry with a rationale, distinctly institutionalist, for the reform of the financial system. There is a statement on the effect of recent innovations in financial services which is interpreted in the theory of institutional change. A wide spectrum of the literature on financial policy is critiqued with the goal of developing a pragmatic interpretation, an hermeneutic. The basic question of why we substitute an administrative process for a market outcome in regulation of finance is addressed. Finally, a set of fundamentals for the reform of the system are put forth.