Democracy and Diversity in Financial Market Regulation

Financial markets have become acknowledged as a source of crisis, and discussion of them has shifted from economics, through legal and regulatory studies, to politics. Events from 2008 onwards raise important, cross-disciplinary questions: must financial markets drive states into political and existential crisis, must public finances take over private losses, must citizens endure austerity? This book argues that there is an alternative. If the financial system were less 'connected', contagion within the market would be reduced and crises would become more localised and intermittent, less global and pervasive. The question then becomes how to reduce connectedness within financial markets. This book argues that the democratic direction of financial market policies can deliver this. Politicising financial market policies – taking discussion of these issues out of the sphere of the 'technical' and putting it into the same democratically contested space as, for example, health and welfare policies – would encourage differing policies to emerge in different countries. Diversity of regulatory regimes would result in some business models being attracted to some jurisdictions, others to others. The resulting heterogeneity, when viewed from a global perspective, would be a reversal of recent and current tendencies towards one single/global 'level playing field', within which all financial firms and sectors have become closely connected and across which contagion inevitably reigns. Reviews 'A timely challenge to technocratic group think and an important argument for more democratic and diverse regulation' - Karel Williams, CRESC and Manchester Business School, UK 'Dorn places financial markets in historical, cultural and political context, returning us to questions about the purpose of finance, all the more pressing in today's Europe' - Matjaž Jager, Faculty of Law, Ljubljana, Slovenia 'Drawing from legal, political, anthropological and sociological scholarship, the single thread which ties together Dorn’s material is an original and radically counter-intuitive argument' - Nathan Coombs, School of Social and Political Science, University of Edinburgh.