1. What is financial regulation?

Financial regulation is defined as “laws and rules that govern what financial institutions such as banks, brokers and investment companies can do.  These rules are generally promulgated by government regulators or international groups to protect investors, mainly orderly markets and promote financial stability.  The range of regulatory activities can include setting minimum standards for capital and conduct, making regular inspections, and investigating and prosecuting misconduct”. This definition should have been sent to Patrick Neary (Financial Regulator in Ireland from 2003 – 2009) as he failed in his duties to protect consumers and promote financial stability. 

Many economists believe that Ireland never benefited from real financial regulation as no financial  institution or chief executive has ever been charged with a crime regardless of the robbery of millions of euros in the past.  Patrick Neary stepped down as the Financial Regulator in Ireland in January 2009.  He was widely condemned for his “light-touch” approach to regulation regarding Irish financial institutions and the role of his office in a scandal involving the directors of Anglo Irish Bank.  This lax supervision by the Financial Regulator initiated a number of interventions by the Irish Government, starting with a guarantee in September 2008.  The lax regulatory regime led by Patrick Neary is a contributing factor to the significance of the 2008-2010 economic crash in Ireland.   

  

 Patrick Neary, Financial Regulator in Ireland (2003 - 2009)

Sources:  http://lexicon.ft.com/Term?term=financial-regulation

http://www.irishstatutebook.ie/2003/en/act/pub/0012/index.html