Blyth: No Global Sweet Spot for Bank Regulation

February 23, 2010

There is no “global sweet spot” when it comes to determining the right type and level of bank regulation in the wake of the recent financial crisis, according to Institute Faculty Fellow Mark Blyth. And yet, “This one-size-fits-all presumption concerning regulation seems to have been accepted by regulators and commentators as a necessary background condition for reform, swaddled under the idea of fair competition and ‘level playing fields,’” he said in a recently co-authored response on the Financial Times’ op-ed page.

Host country regulations are best, Blyth and co-author Leonard Seabrooke wrote, because they create “an unlevel playing field that might actually benefit the citizens of the countries involved.”

Blyth is also a member of the Warwick Commission on International Financial Reform, which recently issued a report, In Praise of Unlevel Playing Fields, calling for greater emphasis on host country regulation within a more legitimate system of international cooperation.