Bubbles, Manias and Market Failures: The Unintended Consequences of Regulatory Responses

Although financial bubbles are in some sense banal and a feature of financial capitalism, the seeds of the next bubble are often sown by regulatory responses to previous ones. This has been the case since the South Sea Bubble and Mississippi Scheme, and has recurred at regular intervals in the intervening 300 years. 

This lecture explores how regulators try to prevent what will hopefully be the ‘last’ bubble and suggests that the most effective regulatory frameworks were developed during the normal operation of markets, not in response to crises.