{
  "title": "The Perimeter of Financial Regulation",
  "publication": "IMF Staff Position Notes, March 26, 2009",
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  "summary": "The G-20 has called for a review of the scope of financial regulation. This call reflects concern that the coverage of prudential regulation has been too narrow.",
  "sections": [
    {
      "heading": "Context and Rationale",
      "content": "- The G-20 has called for a review of the scope of financial regulation, reflecting concern that the coverage of prudential regulation has been too narrow.\n- The paper emphasizes weighing the experience of the past two years against considerations for extending the regulatory perimeter.\n- Key question: whether assumptions underlying the existing regulatory model for banks are fatally flawed, or whether better regulation and supervision of banks would be adequate."
    },
    {
      "heading": "Scope of Proposed Extensions",
      "content": "- Proposals imply a major increase in the scope of regulation of:\n  - institutions,\n  - products,\n  - markets.\n- The proposals would be best advanced as part of a broad program of financial sector reform, including the development of a macroprudential framework for assessing and managing systemwide risk."
    },
    {
      "heading": "Implementation Considerations",
      "content": "- Any extension of the perimeter should be carefully designed to be proportionate to the risks in each new area.\n- Important to understand trade-offs between:\n  - extending prudential coverage, and\n  - improving regulation and supervision within the existing banking regulatory model."
    },
    {
      "heading": "Costs, Risks, and Trade-offs",
      "content": "- Even proportionate new regulation will clearly increase costs to the system.\n- Expected consequences include:\n  - an increased regulatory burden,\n  - risks of unintended consequences.\n- The current crisis-related experience demonstrates that the cost of not addressing gaps in coverage is also high."
    },
    {
      "heading": "Subject Areas and Keywords (as provided)",
      "content": "- Subjects: Asset and liability management; Banking; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Hedge funds; Liquidity; Liquidity risk; Securities; Systemic risk.\n- Keywords: bank; firm; Hedge funds; Liquidity; Liquidity risk; market; market conduct standard; market discipline; market expectation; market liquidity; market participant; prudential regulation; risk; risk products; Securities; SPN; Systemic risk.\n\n---\n\n Content in this bundle\n\n- spn0907\n  - spn0907 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - spn0907 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-staff-position-notes/issues/2016/12/31/the-perimeter-of-financial-regulation-22826"
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    "Authors: Luisa Zanforlin, Ian Tower, Erlend Nier, Michael Moore, Ana Carvajal, Randall Dodd",
    "Published: March 26, 2009",
    "Series: IMF Staff Position Notes",
    "DOI: https://doi.org/10.5089/9781455296620.004",
    "The G-20 has called for a review of the scope of financial regulation, reflecting concern that the coverage of prudential regulation has been too narrow.",
    "The paper emphasizes weighing the experience of the past two years against considerations for extending the regulatory perimeter.",
    "Key question: whether assumptions underlying the existing regulatory model for banks are fatally flawed, or whether better regulation and supervision of banks would be adequate.",
    "Proposals imply a major increase in the scope of regulation of:",
    "The proposals would be best advanced as part of a broad program of financial sector reform, including the development of a macroprudential framework for assessing and managing systemwide risk.",
    "Any extension of the perimeter should be carefully designed to be proportionate to the risks in each new area.",
    "Important to understand trade-offs between:",
    "Even proportionate new regulation will clearly increase costs to the system.",
    "Expected consequences include:",
    "The current crisis-related experience demonstrates that the cost of not addressing gaps in coverage is also high.",
    "Subjects: Asset and liability management; Banking; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Hedge funds; Liquidity; Liquidity risk; Securities; Systemic risk.",
    "Keywords: bank; firm; Hedge funds; Liquidity; Liquidity risk; market; market conduct standard; market discipline; market expectation; market liquidity; market participant; prudential regulation; risk; risk products; Securities; SPN; Systemic risk.",
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