IPD AI Insights

The Past and Future of American Finance: American Experimentalism without American Exceptionalism

12/28/2010
Journal Articles
De Gruyter
Debt and Global Finance

Finance and its reform now lie at the center of American and world attention. Yet the debate that has taken place about the reform of finance, at home as well as abroad, has been extraordinarily narrow. I argue here that its central defect has been to remain within the limits of attempts to regulate finance rather than to reshape it

This piece introduces the distinction between financial regulatory reform and institutional reconstruction and argues that efforts in the US and other countries to reform the regulation of finance can and should serve as a first step towards institutional reconstruction. The financial crisis has revealed a series of problems that cannot be solved by mere regulation. They require innovations designed to reorganize the relation of finance to the real economy. To this end, we need a practice of legal and economic analysis attentive to institutional realities and possibilities. This piece exemplifies such a practice in the setting of US financial reform.