Financial Regulation and Supervision: A Review of Three Books (1987)

Much attention is being paid to the regulation and supervision of financial institutions and in this field there have been three important books published recently. They are: • E.P.M. Gardener, UK Banking Supervision; Evolution, Practice and Issues (London: Allen & Unwin, 1986). • E.J. Kane, The Gathering Crisis in Federal Deposit Insurance (Cambridge, MA: MIT Press, 1985). • G.J. Benston, R.A. Eisenbeis, P.M. Horvitz, E.J. Kane and G.G. Kaufman Perspectives on Safe and Sound Banking: Past, Present and Future, (Cambridge, MA: MIT Press 1986). In the foreword to Kane’s book, Richard Schmalensee commented: Until quite recently this regulation (of financial services) has not received scholarly attention commensurate with its economic importance; it seemed to fall into a large crack, separating students of regulation, whose backgrounds rarely equipped them to analyse financial markets, and students of finance, who were not generally much interested in regulation and its effects. Recent events, such as greater interest rate volatility and credit risks, have, however, put increased pressure on regulatory systems, and have led economists to reassess the operation and adequacy of such regulation, as these three books attest.