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The Growing Importance of Risk in Regulation

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  • Ojo, Marianne

Abstract

This paper traces the developments that have contributed to the importance of risk in regulation. Not only does it consider theories associated with risk, it also discusses explanations as to why risk has become so important within regulatory and governmental circles. Two forms of risk regulation, namely risk based regulation and meta regulation are considered. As well as considering the application of both in jurisdictions such as the UK, the paper places greater focus in discussing the importance of meta regulation in jurisdictions such as Germany, Italy and the US. The preference for meta regulation is based on the premises, not only of the advantages considered in this paper but also on the application of Basel 11 in several jurisdictions. Whilst meta regulation also has its disadvantages, the impact of risk based regulation on the use of external auditors plays a part in the preference for meta regulation.

Suggested Citation

  • Ojo, Marianne, 2009. "The Growing Importance of Risk in Regulation," MPRA Paper 13723, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13723
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    File URL: https://mpra.ub.uni-muenchen.de/13723/1/MPRA_paper_13723.pdf
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    References listed on IDEAS

    as
    1. Marco Moscadelli, 2004. "The modelling of operational risk: experience with the analysis of the data collected by the Basel Committee," Temi di discussione (Economic working papers) 517, Bank of Italy, Economic Research and International Relations Area.
    2. Parker,Christine, 2002. "The Open Corporation," Cambridge Books, Cambridge University Press, number 9780521818902, September.
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    More about this item

    Keywords

    meta regulation; enforced self regulation; risk; compliance;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law

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