The Governance of Financial Regulation: Reform Lessons from the Recent Crisis

There was a systemic failure of financial regulation: Senior policymakers repeatedly enacted and implemented policies that destabilized the global financial system, and the authorities maintained these policies even as they learned about the deleterious consequences of their policies during the decade before the crisis. The absence of an informed, expertly staffed, and independent institution that evaluates financial regulation from the public's perspective is a critical defect in the governance of financial regulation - the system associated with selecting, enforcing, and reforming financial policies. I propose a new institution to address this defect.