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Financial crises pose a challenge to the legal systems of the concerned countries and international organizations. The current crisis has exposed significant failures of regulation and supervision, making the Financial Market Law a key topic on the political agenda. Thus, great changes and challenges are ahead of us. These were the focus of an interdisciplinary and comparative conference held at the University of Marburg. The paper deals with the individual presentations and carries out an overall analysis.

The paper covers the most important issues in financial regulation.

An extensive regulation is confronted with several obstacles; suitable approach could be the co-regulation; desirable aim is the instauration of the mechanism of capital markets. Those who gain the benefits in case of success should also bear the losses in case of failure instead of being rescued at taxpayers’ expense.

The difficulties arising from extensive regulation suggest a more liberal approach to financial regulation.

This study aims to seek to fill a gap in regulatory impact assessment in developing countries by presenting an analysis of how formal regulation impact on the efficiency and productivity of financial non-governmental organisations (FNGOs) in Ghana. Much has been written about the formal financial sector, but very little is known about the lower end of microfinance and the impact of formal prudential regulation on FNGOs providing microfinance services. The Bank of Ghana (BOG), nevertheless, in the year 2011, extended formal prudential regulation to FNGOs without any empirical basis. This study uses regulatory theories and empirical evidence to aid in the evaluation of whether formal prudential regulation is appropriate for FNGOs operating within the microfinance sector.

Empirical evidence derived from FNGOs, regulatory agents, consumers and financial lawyers within the Greater Accra and Ashanti Regions of Ghana served as the basis of the analysis in this study. Descriptive statistics, frequency counts and percentage scores, were used to analyse the data collected.

The existing structures of FNGOs in Ghana are unsuitable for formal prudential regulation. The BOG does not have adequate staffing and funding to supervise and monitor the microfinance activities of FNGOs. Formal prudential regulation could impede growth and efficient delivery of microfinance services.

The BOG is the only regulatory agency responsible for regulating the financial market in Ghana, thus access to officers with knowledge in the regulatory regime was very limited.

The study revealed in depth information about FNGOs, microfinance and the impact of formal prudential regulation on FNGOs.

The study is the first to use empirical studies and theories of regulation to assess the impact of extending formal prudential regulation to FNGOs in Ghana. Data from the regulator, the regulated and consumers, the key players in any regulatory process, served as the basis of the analysis in the study resulting in the unravelling of in-depth information on the regulation of FNGOs.

Several recent developments (notably, the breakdown of traditional distinctions between different types of financial activity, the globalisation of financial markets and increasing emphasis on systemic stability as a regulatory objective) have prompted policy‐makers to search for an ‘optimum’ regulatory structure that is adapted to the new market environment. Further impetus has been given to this debate by the radical overhaul of regulatory structures, along quite different lines in Australia, the UK and Japan, and the ongoing deliberations within the US Congress over structured financial reform. This paper examines alternative ways of organising the regulatory function in the context of the new financial market environment. The first section reviews the objectives, targets and techniques of regulation. The second section describes the new market environment and the restructuring of the financial services industry. The third section assesses the implications of this new environment for the structure of regulation. The fourth section addresses the international dimension. The final section provides a summary and conclusion. The paper is based on a presentation made at the World Bank Conference, El Salvador, June 1998.

This is the second of two papers which examine the question of whether Arab securities regulations can be the subject matter of a methodological study in comparative securities regulation, especially with reference to EU regulations. Part One was published in Journal of Financial Regulation and Compliance Volume Eight, Number Four. This paper addresses the specific juridical impact of Shari'a on capital markets, before looking at its impact on capital market laws of Jordan, Kuwait and Oman. In order to provide an empirical insight into existing Arab securities regulations, the paper also surveys the securities and company laws in the aforementioned countries. Such a discussion also includes a brief examination of market conditions, especially the early factors that accompanied the genesis of such Arab securities markets, notably in Kuwait. The paper concludes by addressing the question of the suitability of the Arab markets selected for this study to comparative studies in EU securities regulation, especially in the context of contemporary internationalisation of securities regulation. It explains in the process why the European experience is relevant (particularly in light of the many EU—Arab association agreements to take effect from 2010, together with EU ‘harmonisation’, ‘minimum standards’, and ‘single passport’ regulatory concepts).

The purpose of this paper is to examine the nature and development of corporate accounting regulation in Libya.

Questionnaire survey and semi-structured interview methods were used to collect data. Semi-structured interviews were conducted with external auditors, financial managers, accounting academics and regulators.

This paper found general agreement that the accounting regulation of public corporations and banks is strongly influenced by the Libyan Commercial Code and the Income Tax Law. Although listed companies and the banking sector in Libya are required to comply with International Accounting Standards (IASs), the majority of them still comply with the US Generally Accepted Accounting Principles (US GAAP). Moreover, the conclusion that can be drawn from this study is that the enforcement of IASs through the Libyan Accountants and Auditors Association (LAAA), local auditors and the Libyan Stock Market has not achieved its purpose. The results also indicate that the accounting profession in Libya is still in its infancy and still lacks clear structure in order to develop corporate accounting practice and it appears to play only an important role in retaining external influences on the accounting practice. The empirical results of this research show that the Salter and Niswander (1995) criteria (longevity, setting exam and auditors’ opinion on companies’ financial reports) found that the level of professionalism in Libya is below the required standard.

This paper focuses on corporate accounting regulation and practices and the role of the LAAA in the development of corporate accounting in Libya. This paper, therefore, aims to contribute to the literature by examining the corporate accounting regulation in Libya and fills a gap in international accounting research.

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

A meticulous legal research is carried out. First, the pre‐crisis regulatory regime for credit default swap (CDS) is reviewed, from a securities law angle as well as from a comparative Euro‐American perspective. Next, the regulatory processes leading to the adoption of the central clearing regulations are discussed. Thereafter, a material comparative analysis is made of the provisions related to central clearing in the EU and US regulatory initiatives. Finally, the paper is concluded with an evaluation of both legislations in the light of all previous analyses.

The research first shows that central clearing regulations rely on a series of presumptions, both concerning the gravity of counterparty risk threats and the necessity of central clearing. Additionally, the EU and US clearing regulations are similar with regard to the broad innovations they introduce, i.e. the mandatory central clearing of a variety of over‐the‐counter derivatives and counterparty risk management requirements for central clearing institutions and for non‐cleared swaps. However, the specific content of the provisions often differs. Furthermore, both legislations are limited to enouncing broad principles. This is also the case for the crucial provisions related to counterparty risk management. Therefore, these provisions in se do not guarantee the proper regulation of counterparty risk management practices. Consequently, much is to be expected from the implementing measures adopted by regulatory institutions.

The paper provides an overview of those provisions in the European and US regulations that specifically concern central clearing for CDS. It is one of the first papers which does this in a very well‐structured and clearly written manner. Also it is one of the first to provide a clear comparison between the provisions in the EU and the US regulations.

This paper aims to establish the effect of bank regulations on financial stability in Kenya. Specifically, the study seeks to uncover the effect of micro and macro prudential regulations on financial stability and their trade-offs or complementarities.

Using annual time series data over the period 1990–2017, the study uses structural equation model (SEM) estimation technique. This solves the problem of approximating measurement errors, using both latent constructs and indicator constructs.

Study findings reveal that macro and micro prudential regulations are significant drivers of financial stability. Further, prudential regulations are more effective when they complement each other.

This study centers on how bank regulations affect financial stability. Future research could be carried out on the effect of Non-Bank Financial Institutions regulations on financial system stability.

Complementing macro and micro prudential regulation is more effective and efficient in ensuring stability of the financial system other than letting the two policy objectives operate independently.

Regulatory authorities should introduce prudential regulations that would encourage innovations in the banking sector. This ensures easy deposit mobilization that enhances financial inclusion. Prudential regulations that ensure financial stability will be effective when low income earners are included in the financial system.

To the best of the authors’ knowledge, this study is the first to investigate the role of banking regulations on financial stability. This study is also pioneering in the use of SEM estimation technique, in examining how prudential regulations affect financial stability. Previous cross-country studies have focused on macro prudential regulations ignoring the importance of micro prudential regulations.

This study examines whether a regulation on mandatory disclosure of financial forecasts since June 1991 and further sanction imposition since March 1998 contribute to lower IPO firms’ initial and aftermarket returns, and shorten honeymoon periods. The study is based on 423 IPO firms after the regulation required them to disclose their forecasts and 53 IPO firms prior to the regulation. The findings report that initial and aftermarket returns are lower, and honeymoon periods are shorter in the post‐regulation period than those in the pre‐regulation. The findings also report that initial and aftermarket returns are relatively smaller, and the honeymoon periods are shorter after the March 1998 regulatory sanction was imposed after controlling other variables. These results document that the financial forecasts disclosure regulation evidently contributes to mitigating information asymmetry.

This article aims to provide insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe.

First the authors define the potential changes in financial markets and then the tools available for the regulator to tame them. Finally, they build five scenarios according to the main evolutions observed on the financial markets and on the tools used by the regulator to modify these trends.

Among the five scenarios defined, two present highly unstable features since the regulator refuses to choose between financial opening and independently determining how to regulate finance in order to preserve financial stability. Three of them achieve financial stability. However, they are more or less efficient or feasible. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst, because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: this level of coordination seems much more realistic than the global one; the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the “European government” might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world.

Foresight studies on financial markets and regulation are quite rare. This may be explained by the difficulty to forecast what will be their evolution in the coming decades, not least because finance is fundamentally unstable. This paper provides a framework to consider what could be the best strategy of regulators in such an unstable environment.

This paper aims to examine the impact of bank regulation and supervision on financial stability. Financial sector reform, especially in developing countries, takes the form of a sudden adjustment in regulation and supervision. The main objective of the paper is to examine whether this fast and sudden adjustment in regulation and supervision has an undesirable impact on financial stability. Furthermore, the paper examines the role of real economic development in determining the impact of financial reform on financial stability.

Empirically, on a sample of 57 developing countries over the period 2000-2013, the author explored the impact of bank regulation and supervision on financial stability for different sub-groups of countries. The division is based on the real level of economic development and, most importantly, on the speed of adjustment in regulation and supervision. The study uses the cross-sectional–ordinary least square model. Each country has three observations (average 2000-2004, average 2005-2008 and average 2009-2013), which are convenient, with the date of the three surveys on regulation and supervision (2002-2006-2011). The period of the averages is selected to cover periods before and after the survey as regulation and supervision may be adopted before the survey and as its impact may persist for the period after.

The major finding of this study is that it supports the important role of the speed of adjustment in regulation and supervision, and its impact on financial stability. Soft adjustment in regulation and supervision has more positive impact on financial stability than fast adjustment. Activity restrictions have positive and significant impact on financial stability in soft adjustment countries’ group. On the other hand, in countries with fast adjustment, results show negative and statistically significant impact on financial stability, especially for supervisory independence. More time is needed for supervisors to adapt to new regulation and supervision and gain expertise to monitor financial condition of banks in a consistent manner. Results also show that the level of economic development is an important factor when testing the impact of regulation and supervision on financial stability. In lower income countries, more room is available for corruption in lending, which has a negative impact on financial stability.

This study advocates the necessity of taking the speed of adjustment in regulation and supervision by policymakers in developing countries, while initiating reform in the financial sector. Financial sector reform that takes the form of a sudden adjustment in regulation and supervision may have undesirable results in terms of financial stability. On the other hand, soft adjustment in regulation and supervision, which gives more room for supervisors to adapt and gain expertise, may have more positive impact on financial stability.

This paper is the first paper to explore new methods of calculating the speed of adjustment in regulation and supervision, and to examine whether the high speed of financial reform in developing countries has an undesirable impact on financial stability.