Abstract
Abstract Chapter 4 delves into the translation of new economic ideas on risk regulation into specific policy tools tailored to a financialized economy. Moving beyond the dominant narrative that links American neoliberalism primarily to deregulation, this chapter unveils a more multifaceted policy transformation from the 1970s onward, which was not a mere reduction of rules but a reimagining of government and market roles in risk mitigation. While deregulation was significant—paving the way for new market entities and instruments—it was just one facet of the shift. As financial markets evolved, presenting new risks, the government’s response was often characterized by a regulatory drift, with existing statutes becoming outdated. When the government stepped in, it did so with a growing focus on market discipline and individual rationality, evident both in its pivot toward a micro-oriented regulation and its embrace of information-based measures.
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