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SUMMARY:Regulatory responses to financial crises: Spain\, 1850-2000 - Prof
 essor Pablo Martín-Aceña\, Universidad de Alcalá (Madrid)
DTSTART:20110228T170000Z
DTEND:20110228T190000Z
UID:TALK30020@talks.cam.ac.uk
CONTACT:D'Maris Coffman
DESCRIPTION:Financial crises have been examined under many perspectives\, 
 including that of regulatory failures. However\, the effects of crisis on 
 regulation are less well known. Generally\, after a major crisis\, the fai
 th in the market dwindles and the partisans of strong regulation tend to h
 ave the upper hand. In a recent paper on the history of financial supervis
 ion\, Goodhart has put it clearly: what historical record demonstrates\, a
 nd as every central banker and practitioner comes to understand\, is that 
 regulation and supervision are primarily reactive. In Goodhart´s words\, 
 when something goes wrong in the financial system\, some people lose money
  and then almost by definition the existing system of supervision and regu
 lation is held to be at fault. Politicians feel the need to be seen to be 
 taking actions to make sure that that particular disaster never happens ag
 ain. Then the result is to find ways to tighten regulations and change the
  supervisory rules. \n\nLike the rest of the world\, Spain has suffered fr
 equent financial crises and undergone several changes in its regulatory fr
 amework. There have been crises that have been followed by reforms of the 
 financial structure\, and also trouble financial times with no modificatio
 n of the regulatory and supervisory regime. In various instances\, regulat
 ory changes have predated financial crisis\, but in other banking crises h
 ave occurred without reference to changes in the regulatory regime. Regula
 tion and supervision have been usually absent in the XIXth century\, while
  in the XXth century policy makers have been more active and diligent. Mor
 eover\, all major financial crises have produced intense financial restruc
 turing\, although as elsewhere banking restructuring and interventions not
  always have been successful.\n\nAlthough we know the major trends of the 
 Spanish regulatory cycles\, there still many questions to be answered. Has
  been the Spanish financial system adequately regulated? Do financial refo
 rms and regulations have contributed to banking stability? Have financial 
 reforms been introduced as a response to financial crises or predated them
 ? What government agencies have been responsible for banking supervision? 
 Does Spanish regulation conform to a common regulatory European pattern or
 \, on the contrary\, country-specific political and economic factors have 
 mattered more? \nThe study regulation and supervision for a small and peri
 pheral country in a historical perspective is of interest for several reas
 ons. First\, the examination of a nation’s case\, such as that of Spain\
 , may contribute to a better understanding of how regulation and supervisi
 on have changed in the last two centuries. Second\, although one of the pr
 imary purposes of banking regulation and supervision is to promote stabili
 ty\, they can also have ancillary effects on the aggregate economy by affe
 cting bank behavior. The Spanish economic experience\, moving from underde
 velopment in the XIXth century to development in the XXth century\, provid
 es evidence of how the regulatory framework may affect economic performanc
 e through bank lending behavior. Finally\, a look at the Spanish case may 
 also shed light to the permanent debate between the two theoretical approa
 ches that compete to explain the historic cycles of financial regulations:
  one base on a public interest motivation\, and the other emphasizing the 
 role of private interest.\n
LOCATION:Lucia Windsor Room\, Newnham College
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