Regulating Banks: The Politics of Instability

Banks have been the focus of scrutiny and regulation since the 2008 financial crisis. Andrew Whitworth's book "Regulating Banks" argues that the institutional form of a bank represents a political compromise that can change, leading to greater financial instability. He examines the postwar period of UK banking to show how regulation influences the nature of banks and their behavior, leading to future boom and bust cycles.

Format: Hardback
Length: 208 pages
Publication date: 09 December 2021
Publisher: Agenda Publishing

Banks have played a central role in economic activity for centuries, but since the 2008 financial crisis, their activities and regulation have become the subject of intense academic, policy, and political scrutiny. This scrutiny assumes the existence and nature of banks without questioning them further. In his book, Regulating Banks, Andrew Whitworth delves one step deeper to question what a bank really is and what the implications of that are. He argues that the institutional form of a bank represents a political compromise specific to a particular time and place and can therefore change. This has significant implications for financial stability. Contrary to the belief that regulation creates stability, Whitworth contends that it inevitably leads to greater financial instability.

Whitworth examines the postwar period of UK banking to demonstrate how regulation influences the nature of banks as well as their behavior. Regulation, by altering the scope of what is regulated, encourages banks and other actors over time to change their behavior, leading to future boom-and-bust cycles. These cycles then require further regulation to rein in the disruption caused by their new pattern of behavior.

Regulating Banks sheds light on the cyclical nature of banking regulation, the inherent mismatch between political impulses and market reactions, and the costs that banks, banking, and society pay for such instability. It is a thought-provoking book that challenges the conventional understanding of banks and their role in the financial system.

Weight: 474g
Dimension: 165 x 242 x 25 (mm)
ISBN-13: 9781788214049