Enhancing Responsibility in Financial Regulation - Critically Examining the Future of Public-private Governance

Enhancing Responsibility in Financial Regulation - Critically Examining the Future of Public-private Governance

Iris H-Y Chiu

Section A of the article argues that 'financial regulation' is essentially a regulatory space, ie a landscape where a variety of actors and interest groups may have resources, capacity and ability to exert influence over the governance of issue areas in the landscape. The regulatory space is dominated by the industry and regulatory agencies, giving rise to governance driven by industry interests and objectives as well as public interest. Section B of the article then provides a literature review of modern governance and regulation theories to show how 'public-private' models in governance have been developed in contemporary theory and practice. Section C draws on the literature review to discuss specific areas in financial regulation represented by different models of 'public-private governance' and critically examines the nature of 'public-private governance' in the context of the global financial crisis. Section D argues that 'public-private governance' in financial regulation has given rise to problems of unaccountability, agency and capture, and some suggestions are made in relation to the dynamics of the 'public-private governance' going forward.

Part 1: Law and Financial Markets Review, Vol. 4, No. 2, Mar 2010: 170-188.  Online

Part 2:Law and Financial Markets Review, Vol. 4, No. 3, May 2010: 286-313.  Online

Originally Published: 
01/01/2011