The Four Ages of Banking Regulation: What to Do Today?

This paper illustrates the evolution of banking regulation since the 19th century, with a focus on the banking deregulation and the response to the 2007-09 crisis. It explains how some jurisdictions, e.g. the US, recently have deviated from the international standards, creating the conditions for the 2023 banking crises. There is the need to resist the pressures to deregulate and to reduce regulatory complexity, while pursuing the right balance between proportionality and financial stability. Prudential authorities would increase their capacity to deal with unexpected events and intermediaries would reduce compliance costs and incentives to bring risks outside the regulatory perimeter.