In view of the importance of the financial sector to economic performance, it is not surprising that both financial institutions and financial markets are subject to regulatory scrutiny. Regulation can be beneficial to those who issue direct claims as well as to those who invest. It also benefits financial intermediaries and their customers if it can reduce expenditures on information gathering and monitoring. Moreover, maintenance of confidence in the safety and soundness of financial institutions is critical to macroeconomic stability [3,4]. Even if the government attempts to maintain a stable macroeconomic environment, unanticipated shocks will inevitably occur, and so it is also important that the government foster a resilient financial infrastructure which can withstand volatility in financial market prices without amplifying the shocks to the real economy. This requires attention to the micro-economic structure of financial institutions and markets [5].
展开▼
