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The aim of this study is to analyse the transformation of the Ecuadorian financial system using the regulatory dialectic approach (Kane, 1977). This research examines the initial conditions and motivating factors of the reform process, as well as the interplay between government and bankers during the period 2007-2012.

Kane’s regulatory dialectic suggests that regulation of financial institutions is a series of cyclical interactions between opposing political and economic forces. Three main stages are identified: thesis (measures and regulatory actions), antithesis (avoidance/lobby against those reforms) and synthesis (adaptive reregulation resulting from the interaction between interest groups).

Since 2007, the government focused on regulating interest rates, developing a liquidity fund for banking emergencies, increasing taxation and restricting international capital flows. These government initiatives took place against a background of conflicting interests. Private bankers opposed the majority regarding them as burdensome new rules, rather than enlightened reforms. Publicly, these reforms as intended by the government were seemingly supported. Finally through the political process, they were approved. To date, these reforms have strengthened the financial system, produced encouraging social policy results and placed the financial sector to serve the government’s development strategy.

Using Kane’s notion of regulatory dialectic, we explain the process of financial reform in Ecuador as part of a cyclical interaction between opposing forces. Drawing on this framework enabled insight into the nature of government intervention. Hence, we show how that intervention affected the growth, development and structure of the banking system.

The purpose of this study is to describe the opportunities and limitations of cryptocurrencies as a tool for money laundering through six currently available “open doors” (exchange mechanisms). The authors link the regulatory dialectic paradigm to know your customer and anti-money laundering evasion techniques, highlight six tactics to launder funds with virtual assets and investigate potential law enforcement and regulatory alternates used to reduce the incidence of money laundering with digital coins.

The methodology used is the analysis of significant recent events and the availability of “fintech” crime-fighting tools and a literature review focusing on the application of the regulatory dialectic to innovations in existing crypto-asset markets that make them compelling to money launderers.

The authors examine the illicit use of cryptocurrency through Kane’s regulatory dialectic paradigm, identify a number of avenues for crypto to fiat exchange that are still available for those seeking to launder money using digital coins, review recently “closed doors” and make recommendations regarding the regulation of crypto-related markets that may assist in making them less desirable for potential criminals.

The research is constrained by the state of the market for crypto to fiat exchange as of time of writing; the technology and products to launder money using these open doors is continually changing (as predicted by the regulatory dialectic).

The regulatory dialectic predicts that regulatory response is reactive and often increasingly burdensome or oppressive. There is continuous innovation in the cryptocurrency market, which seeks to preserve privacy and anonymity with which regulators seek to keep up. From a social perspective, the response of bank regulators worldwide to existing open doors for crypto to fiat exchange used for money laundering may prove costly to individuals engaging in legitimate transactions, as well as financial criminals and may also erode the ability of individuals to maintain privacy regarding their financial information.

To the authors’ knowledge, there are yet no broad overview regarding the feasibility of money laundering across crypto-related assets within the paradigm of the regulatory dialectic.

The purpose of this study is to describe the present taxonomy of money, summarize potential central bank digital currency (CBDC) regimes that central banks worldwide could adopt and explore the implications of the introduction of each of these CDBC regimes for money laundering through the lens of the regulatory dialectic theory.

The methodology used in the analysis of significant recent events regarding the progress of central banks in establishing a CBDC and the implications for money laundering under a CBDC regime. This paper also reviews the literature regarding the Regulatory Dialectic to highlight potential innovative responses of money launderers to circumvent the controls generated through the implementation of a CBDC.

This study examines the impact of Kane’s regulatory dialectic paradigm on the feasibility of money laundering under a CBDC regime and identifies potential avenues that would be available for those seeking to launder money, based on the form a CBDC would take.

This paper is unable as of yet to empirically evaluate anti-money laundering (AML) tactics under a CBDC regime as it has not yet been fully implemented.

Many central banks worldwide are evaluating the structure of and introduction of a CBDC. There are a number of forms that a CBDC could take, each of which has implications for individual privacy and for entities involved in AML efforts within financial institutions and the regulatory community. The paper has implications for AML experts who are considering how AML procedures would change under a CBDC regime.

The regulatory dialectic predicts that regulatory response reactive, rather than proactive when it comes to socially undesirable phenomena. As central banks and governments seek to divert economic activity away from the laundering of the proceeds of illicit activity, there are tradeoffs in terms of a loss of privacy. The regulatory dialectic predicts a corresponding innovative response of those who wish to undermine the controls generated through the establishment of a CBDC.

To the authors’ knowledge, this is the first paper to explore the impact of a potential CBDC on money laundering and the potential innovative circumventions within the paradigm of the Regulatory Dialectic.

This paper aims to trace the evolution of Indian financial market structure and regulation, in the broad dialectic sense and to suggest a consolidated, holistic regulatory model.

The paper sketches the evolution of Indian financial market structure and its regulation in terms of dialectic cycles. The first cycle extending practically over four decades, from the 1950s to the 1980s, was a period of foundation, expansion, and policy introspection. The decade of the 1990s marked the commencement of the second cycle – a period of liberalization and emergence of financial conglomerates. The Indian financial system has since completed one full circle in the dialectic process and is now passing through the last phase (synthesis) of the second cycle. Based on this dialectic approach, a consolidated and holistic regulatory model has been developed and suggested.

The paper concludes that, from a regulatory perspective, the recent developments in the financial sector have led to an appreciation of the limitations of the present segmental approach to financial regulation and favors adopting a consolidated supervisory approach to financial regulation and supervision, irrespective of its structural design.

This paper will be of value to financial regulators, financial intermediaries and investors across all the countries, developed as well as developing. It will facilitate and guide in the process of regulatory restructuring and strengthening the overall health of the financial markets.

The purpose of this study is to apply the regulatory dialectic to describe the evolution of trade-based money laundering (TBML) schemes, to describe three recent TBML innovations uncovered by a large bank in the important global trade jurisdiction of the United Arab Emirates (UAE), and to provide recommendations for an effective regulatory response.

The methodology used is a caselet approach with three examples of TBML schemes recently foiled in the UAE as well as an application of the regulatory dialectic literature to TBML.

The implications of the regulatory dialectic for research regarding TBML and associated regulation and compliance will enable regulators, the financial services sector and academics to understand TBML and the ever-evolving steps criminals are taking to circumvent the changing landscape of regulation and controls implemented by the financial services sector and customs tasked with mitigating such behaviour. This paper will bring awareness of the evolution of TBML, the controls and frameworks that may be used to prevent, detect and investigate some of the complex schemes of TBML.

The regulatory dialectic theory provides insights into the evolution of TBML schemes as well as why compliance activities tend to be reactive, rather than proactive. The cases covered in this paper provide insights into the nature of this circular process between financial crime and regulation, which is useful for anti-financial crime professionals and regulators focusing on deterrence.

The UAE is a small, rapidly developing trade and finance center in the Middle East, surrounded by nations that are sanctioned, in active conflicts, politically unstable and/or highly corrupt. TBLM undermines the security of the UAE; the authors provide insights into criminal innovations and regulatory responses.

To promote the safety and stability of the ten million residents of the UAE, and others in the Middle East and North Africa (MENA) region, it is important to understand the process of innovation in TBML schemes and regulatory response.

To the best of the authors’ knowledge, this paper is the first to apply the regulatory dialectic theory to TBML to describe innovation in TBML schemes and to provide cases describing contemporary TBML innovations in the MENA region.

What seems like a new social anthropology of global regulation is an endeavour much too grand for this paper, even though it has much merit. To contain the analysis which follows, the discussion of social embeddedness will be restricted to a comparison of markets which retain some local or regional integrity from those which have become largely removed from cultural or communal social bonds. An example is between markets trading in goods and services with a consumer base which is local and subsistence, and markets in derivative products that are inextricably dependent on supranational location. The paper aims to discuss these issues.

North World regulatory principle operates within consolidated state frameworks, dislocated market societies and reflects socially disembedded productivity relationships. The same could be said for dominant economic regulatory scholarship. More recent efforts to develop critical analysis of South World regulatory problems and answers have consistently remained connected to the referent of the regulatory state. This paper questions the utility of such a comparative conviction in a global governance reality wherein South World regulatory environments are largely subject to North World state interests and multi-national opportunism fostered by disaggregated, often dysfunctional, domestic states.

If, as in many South World contexts, the state is dysfunctional or destructive in translating regulatory principle, then what are the social bonds which advance the integrity of regulatory principle, and what of externalities which work to draw culturally located principle towards a more hegemonic regulatory project? Could appreciating the relationship between regulatory principle and social bonding be exhibited in degrees of market embeddedness? Might the reimagining of regulatory principle be possible by reflecting on motives and outcomes for regulation that have other than wealth maximization as core value? The paper answers these conjectures as a basis for empirical research.

In the spirit of regulatory anthropology it is not helpful to remain immersed in some strained geographic regulatory dichotomy, employing some good state/bad state polarity. Neither World exists in regulatory isolation. International regulatory organizations ensure this through their Western/Northern development models, and perpetuate post-colonial influences over South World development agendas. That said, there are two regulatory worlds, and hybrids between. Despite this, regulatory principle is not immune from cultural forces and social bonding. The paper addresses various dualities in order to propose a new way of viewing South World regulatory paradigms.

The framework for analysis will enable a repositioning of critical scholarship and regulatory policy away from the model frameworks of consolidated states and towards the real regulatory needs and potentials of the South World.

Through applying the analytical technique of social embeddedness above market community paradigms this analysis offers a novel approach to exploring economy in contexts where markets are not dislocated and products are not fictitious. In this way the contemporary materialist economic crisis can be viewed against principles of sustainability rather than growth, productivity and exchange.

The paper draws upon established scholarship regarding market embeddedness and social bonding but unique in applying this to a South World void of regulatory discourse set free of comparison with inappropriate regulatory state referents.

This study aims to examine the impact of regulation and other micro- and macro-economic factors on banks’ productivity growth. It investigates the impact of different regulatory reforms on banks’ performance of total factor productivity (TFP) and its component efficiencies, along with their association with bank-specific variables of profitability and equity, and with macro-level variables of economy and freedom. That is, through analysing the influence of regulatory and supervisory policies related to Basel accords pillars of capital and market discipline through private monitoring; restrictions on bank activities; and economic and financial freedoms on TFP growth and year-end performance in banking.

The authors examine TFP for commercial banks in response to regulatory reforms on an international scale. To estimate the TFP, the authors use a non-parametric frontier technique by calculating the Malmquist output-oriented index, following Delis et al. (2011) and Worthington (1999). The components of the Malmquist index are ratios of distance functions making its estimation a straightforward technique using activity analysis or data envelopment analysis methods. This allows controlling for efficiency changes depending on the reallocation of production frontiers signalling the technical change and the technical efficiency at once.

Results show that high capital requirements enhance productivity growth in North and Latin American banks, but not in European African or Asian banks. Supervisory powers drive bank productivity growth in all regions except Europe and Central Asia. Restrictions on real estate, insurance and securities activities impede productivity change in all income level groups but not in high-income economies. The results also show that market volatility and Z-score drive technological change and scale efficiency growth, but negatively impact pure technical efficiency.

This paper contributes to the literature by examining the relationship between the implementation of regulatory standards and the performance of the banking sector following a structural model of the banking firm and the concept of optimisation. An additional contribution of this study is that it examines economies with different levels of income based on the gross national income per capita. The study summarises bank-specific data used to synthesise the banks’ productivity (inputs and outputs) and country-specific economic and regulatory compliance data over 19 years (1999-2017). The extent of this data set coverage makes it most recent and most conclusive of variables to provide a significant contribution to the literature on bank regulation and efficiency effect.

This paper aims to explain the importance of the international cooperation and coordination among supervisory authorities of different countries in event of banking crises. It also suggests that the harmonious relationship has to be attained in the adoption of ex ante financial regulatory measures and ex post compensation schemes. In other words, the paper highlights the linkage between ex ante preventive regulatory measures and ex post compensation schemes, on the one hand, and cooperation among national regulatory and supervisory authorities in globalized financial markets. Although the paper is relevant to most developed and emerging financial markets, it chooses Hong Kong as a context to examine this proposal. In the current literature, there are no similar approach linking these two paradigms and examining them in an integrated context.

The paper adopts a conceptual framework after the 2008 global financial crisis and takes Hong Kong, an international financial centre in which numerous branches or subsidiaries of foreign financial institutions locate, as an example to examine how the coordination with foreign supervisory authorities are being conducted and to analyse whether the present regulatory framework in Hong Kong is effective and sufficient against banking crises. Through the review of the literature, the important link between ex ante regulatory measures and ex post compensation schemes is found to be significant in adopting proper solutions.

Through analysing the Hong Kong financial regulators’ reports on the collapse of Lehman Brother, the paper finds out that even though there is some weakness in the cooperation and coordination between regulators after the 2008 financial crisis, Hong Kong is still in the progress of proposing bank special resolution regime. Although there has been some awareness on the issue of coordination between home and host states regulatory measures, there is still a lack of awareness of the connection between regulatory measures and compensation schemes.

Conflict of interests could hardly be prevented in the course of cooperation and coordination among home and host regulatory authorities, and the coordination of the important link between ex ante regulatory measures and ex post compensation scheme which involves legal and economic analyses is a challenging task.

The paper’s findings show that there are practical implications for the recent rapid development of special resolution regime for global systematically important financial institutions against future banking crises and for managing the balance between the adoption of financial supervisory laws and special resolution measures.

This paper suggests that the harmonious coordination between ex ante regulatory measures and ex post compensation schemes has to be achieved through international context to avoid the absurd situations. This conceptual integrated framework presented in the current paper is not touched upon by the existing literature. This important concept is valuable for future research, and it is significant to financial regulators, legislators and the government in adjusting policy against banking crises in both developed and developing countries.

The trend towards substituted compliance has accelerated post the 2008 credit crisis and is now being pursued with an enthusiasm that is sidelining the prior trend towards multilateral rule convergence. This paper addressed the question of what to do about other regulatory regimes, such as those in Asia, Africa, and Latin America. The author argues that thought leaders, particularly the G20 and IOSCO, should ask whether financial supervisory convergence should be extended beyond its current UK-EU-US axis. The paper aims to discuss these issues.

Open policy review and discussion.

In conclusion, the current system of financial supervisory convergence has evolved by default. A process of substituted compliance has become the de facto modus operandi between the UK, Europe and the USA since the 2008 credit crisis. It has been widely accepted that competition in regulation is not as efficient as co-operation, provided the same similar risks are addressed by similar rules. The author believes that it makes sense to widen this current uncharted process of supervisory convergence to other international jurisdictions. The challenge, as illustrated, is how to do this. It requires a major gap analysis whereby a global regulatory body like IOSCO compares regulatory oversight and outcomes to expected standards as determined in Europe and the USA under the current status quo. Now that financial stability has been addressed by the regulatory bodies, it is argued that the time is now right to go one step further. That said, to make this happen in a disciplined, efficient and transparent way will require direction. It is pointed out that the G20 is this body that is best mandated to draw up such a roadmap towards financial supervisory convergence.

Policy debate.

Regulatory reform.

Market efficiency.

Thought piece that will provoke debate.

This paper compares the performance of the big four UK banks and four Australian banks between 2004‐2009. The banks are chosen according to the total assets as listed in The Banker magazine 2009. The purpose is to analyse why UK banks were more vulnerable to the financial crisis of 2007‐2009 than Australian banks. The consequence of this study is what improvements can be made in relation to liquidity, leverage, loan to deposit, asset quality and capital ratios.

The author adopts an empirical approach and gathers data from the annual reports of the big four UK banks and Australian banks and the database “Factiva” and the Financial Times. The data contains liquidity, debt, capital, asset quality and profitability ratios during 2004‐2009.

The author's data show UK banks had on average higher cash ratios, higher leverage ratios, higher loan to deposit ratios, higher capital ratios, lower asset quality, lower ROA but higher ROE than the Australian banks.

The results support the findings in the Financial Development Index 2011 of the World Economic Forum. UK banks should ameliorate its ranking on financial stability by improving the quality of loans and capital.

The analysis is of use to regulators who are contemplating the need for reforms aimed at improving financial ratios of banks. Basel III Accord has introduced some recommendations but has its limitations.

This paper's value lies in providing analysis of the top four UK and Australian banks' performances during 2004‐2009. There is room for improvement in providing a more stable financial environment in the UK.