The severity of the 2008 crisis suggests that either the scope or nature of the regulations, or their implementation, failed. The US economy incurred the costs of regulations year in and year out for more than 50 years, and then, when a crisis occurred, several ad hoc initiatives were needed to forestall the implosion of asset values. Perhaps regulation reduced the cost of the crisis. Or perhaps the costs were larger because the regulation had led to a sense of security that proved unwarranted.
Various regulatory initiatives have been adopted to forestall the next crisis or reduce its severity, even though there does not appear to have been a systematic review of why regulation did not allay the 2008 crisis.
This leads to the primary questions addressed at the 2016 Leir Conference. What are the key issues and major trade-offs associated with the financial regulation initiatives prompted by the 2008 global financial crisis? Have the myriad of new regulations reduced the likelihood or severity of future crises?
Download the complete conference proceedings here.