Financial Modernization and Regulation : A Special Issue of the Journal of Financial Services Research

Financial systems around the world are undergoing a process of modernization due to many different forces. Advances in information technology, product and market innovations, and recent regional financial crises have contributed to this movement. As a result, evolution in the financial sector is leading to larger, more complex financial organizations that render inadequate the supervisory and regulatory structures currently in place. While some changes in regulatory policies have already occurred, the adaptation of supervisory oversight and regulation in the face of these new developments is expected to continue for many years to come. This book collects papers originally presented in September 1998 at the Financial Modernization and Regulation Conference co-sponsored by the Federal Reserve Banks of Atlanta and San Francisco. Revised before publication, the papers seek to identify the reasons for changes in the financial services sector, and the implications these changes pose for financial supervision and regulation. Taken together, the papers offer valuable insights on 1) the forces behind financial modernization; 2) the implications financial modernization poses for corporate structure, market discipline, and financial regulation; 3) how to price deposit insurance accurately to reflect banks' risk-taking; and 4) balancing private versus public interests and managing potentially conflicting public policy goals. Front Matter....Pages 1-4 Financial Modernization and Regulation....Pages 5-10 Modernizing Financial Regulation: The Relation Between Interbank Transactions and Supervisory Reform....Pages 11-25 Modernizing Financial Regulation: Implications for Bank Supervision....Pages 27-33 The Subsidy Provided by the Federal Safety Net: Theory and Evidence....Pages 35-55 Comments on “The Subsidy Provided by the Federal Safety Net: Theory and Measurement”....Pages 57-62 The Effects of Setting Deposit Insurance Premiums to Target Insurance Fund Reserves....Pages 63-90 Trends in Organizational Form and their Relationship to Performance: The Case of Foreign Securities Subsidiaries of U.S. Banking Organizations....Pages 91-128 Comments on “Trends in Organizational Form and Their Relationship to Performance: The Case of Foreign Securities Subsidiaries of U.S. Banking Organizations”....Pages 129-131 Financial Regulatory Structure and the Resolution of Conflicting Goals....Pages 133-155 Comments on “Financial Regulatory Structure and the Resolution of Conflicting Goals”....Pages 157-158 Regulatory Distortions in a Competitive Financial Services Industry....Pages 159-169 Comments on “Regulatory Distortions in a Competitive Financial Services Industry”....Pages 171-173 How Offshore Financial Competition Disciplines Exit Resistance by Incentive-Conflicted Bank Regulators....Pages 175-201 Comments on “How Offshore Financial Competition Disciplines Exit Resistance by Incentive-Conflicted Bank Regulators”....Pages 203-206 Alternative Approaches to Financial Supervision and Regulation....Pages 207-213 Financial Modernization and Regulation: Experience from Japan September 16, 1998....Pages 215-217 Financial Regulation: A Perspective from the United Kingdom....Pages 219-227 Europe’s Single Banking Market....Pages 229-232