Open AccessNew financial regulatory philosophy: A paradigm shift in securities market supervision
Author(s) -
Phuong Duong,
Jinghui Liu,
Ian Eddie
Publication year - 2020
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv17i4art1
Subject(s) - financial crisis , security market , financial market , broker dealer , business , financial system , order (exchange) , third market , investment banking , finance , economics , keynesian economics
The objective of this paper is to identify the changes in the financial regulatory philosophy in the securities market supervision after the 2008 global financial crisis. The mix-methodology researches are concluded by interviewing 101 securities regulators to investigate the impacts of the crisis on securities market supervision philosophy. Evidence is found to support the hypothesis that the 2008 global financial crisis has created a paradigm shift from standard finance to behavioural finance in securities supervision. However, regulators are still in a philosophical crisis when the theoretical ground they once believed turned out to be not suitable for the securities supervision. The analysis undertaken in this paper contributes to apprehend the theoretical aspects of the paradigm shift and constructs a pertinent financial regulatory philosophy, which observes the nature of securities markets, responds to the problems revealed by the 2008 global financial crisis, and takes into consideration the nature of emerging markets. Consequently, this paper proposes a multi-fold theoretical ground within the Keynesian regulation framework to be adopted for the construction of a securities market supervision philosophy in order to efficiently cope with market developments and be resilient to financial crises.