Interlinking financial stability regulation and governance in German professional soccer: contribution and implications

The Precautionary Principle: Financial Regulation's Missing Ingredient

Regulatory technology (Reg-Tech) in financial stability supervision: Taxonomy, key methods, applications and future directions

Resurrecting the OFR

This chapter explores the inadequacies of our current financial regulatory system when it comes to fintech. It starts by describing the challenges that technological innovation poses for regulation generally, then looks more specifically at the difficulties inherent in regulating fintech. Some financial regulators have been experimenting with new regulatory approaches (like innovation hubs and regulatory sandboxes) in light of fintech’s ascendance, but most of the experimentation so far has focused on supporting private sector innovation, rather than mitigating the negative consequences of that innovation for financial stability. Because the industry’s adoption of fintech innovations (and regtech innovations) poses some challenges for financial stability regulation, Chapter 5 also considers the role that technological innovations by the regulatory agencies themselves (known as “suptech”) can play in addressing those challenges.

This chapter asks three questions: To what degree has the European financial and debt crises spurred new policies and purposeful action toward improved financial stability regulation? Secondly, how can we theorize the processes that link crises and policy? And thirdly, we ask if what has been achieved is likely to be sufficient to avoid another crisis? We measure policy change along three dimensions: level of aggregation, level of governance, and functional scope, and find significant change along the two first. This is explained by the “failing forward plus learning” framework that we develop. We do, however, find enough chinks in the EUs newly erected armour to predict that processes of failing forward will continue. Thus, we conclude that muddling through best describes the EU’s post-crisis efforts in financial stability regulation.

Security against systemic financial risks is the main theme for financial stability regulation. As modern financial markets are highly interconnected and complex networks, their network resilience is an important indicator of the ability of the financial system to prevent risks. To provide a comprehensive perspective on the network resilience of financial networks, we review the main advances in the literature on network resilience and financial networks. Further, we review the key elements and applications of financial network resilience processing in financial regulation, including financial network information, network resilience measures, financial regulatory technologies, and regulatory applications. Finally, we discuss ongoing challenges and future research directions from the perspective of resilience-based financial systemic risk regulation.

This paper focuses on the interactions between financial regulation and competition in financial markets. Those interactions run deep, and involve consideration of both microand macro-prudential regulation, consumer protection, and access/network regulation. Three fundamental issues permeate the analysis. First, competition is associated with failure and exit of suppliers from the industry (as per Schumpeter’s well known “process of creative destruction” metaphor) – which has implications for financial stability regulation if exit is disorderly. Second, digital technology is rapidly changing the competitive landscape of financial markets, raising issues about the appropriate design of financial regulation and its perimeter. Third, information deficiencies and behavioural biases of consumers of financial services and products, and consequent responses of financial firms to those, are important determinants of the nature of competition in financial markets.

Since the economic reform policy was introduced by the Chinese authority in 1978, the Chinese financial regulatory framework has experienced dramatic changes during the past decades. With the rapid development of the capital markets since early 1990s, China’s regulatory framework of financial markets has been moving towards a sector-based model. In 1998, the regulatory power of securities and insurance markets was spun off from the PBOC to the China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission (CIRC) respectively. Following the amendment of the Commercial Banks Law of the PRC in 2003, China Banking Regulatory Commission (CBRC) was established which took over the PBOC’s regulatory power of commercial banks and trust corporations. The establishment of the above sector-based regulatory system signals the Chinese government’s intention to consolidate regulatory structure in the financial sector by developing expert regulators. Although financial stability has been emphasized by the Chinese authority as early as before the Global Financial Crisis 2008, the regulatory strategies of systematic risk among different sub-sectors in China’s financial system are changing through the past two decades. This essay aims to briefly draw a whole picture of China’s practice of financial stability regulation during the past twenty year

We study financial stability regulation in an environment with pecuniary externalities and where banks face both a liability choice (between private money creation and long-term borrowing) and an asset choice (between liquid and illiquid investments). Return risk on illiquid assets gives rise to liquidity risk, because banks that learn to have low future returns find themselves unable to roll over “money-like” debt. Privately optimal borrowing and investment decisions by banks lead, in general, to socially inefficient outcomes. The nature of inefficiency depends critically on the degree to which liquidity risk is systemic: When risk is highly systemic, banks hold the socially optimal amount of liquid assets, but create an excessive amount of money and overinvest in risky assets; when risk is not highly systemic, banks hold too little liquidity, create insufficient private money, and underinvest in risky assets. Quantity- and price-based regulations to address the identified inefficiencies are discussed.

As one would expect of a piece of legislation that has 16 titles and runs 849 pages in the Statutes at Large, the Dodd–Frank Wall Street Reform and Consumer Protection Act ranges widely in addressing problems both directly and indirectly associated with the financial crisis. Taken as a whole, though, the primary aim of those 849 pages can fairly be read as a reorientation of financial regulation towards safeguarding “financial stability” through the containment of “systemic risk,” phrases that both recur dozens of times throughout the statute. The law, explicitly in many provisions and implicitly in many others, directs the bank regulatory agencies to broaden their focus beyond the soundness of individual banking institutions, and the market regulatory agencies to move beyond their traditional focus on transaction-based investor protection.

Purpose The purpose of this paper is to provide an assessment of the effectiveness of the Salary Cost Management Protocol, a form of financial regulation introduced by the English Football League in 2004 to improve the financial sustainability of professional football (i.e. soccer) clubs. Design/methodology/approach The analytical approach is to assess the effect of the regulation from evidence of change in measures of the financial performance of clubs drawing on three criteria: profitability, liquidity and solvency. A unique database was created from the published financial statements and notes to the accounts of the clubs in the Tier 4 league (known since 2004 as League Two) from 1994 to 2014 to encapsulate the 10-year period before and after the regulation was introduced. To show trends in the data within the study period, the data are reported in graphical form. The statistical significance of change in both the slope and intercepts for trends between breaks of interest in the data is estimated by linear regression. Findings The results show that financial regulation failed to significantly improve the profitability or the solvency of football clubs in League Two. Whilst the liquidity of the clubs improved in response to the introduction of the financial regulation, the results show this was only in the year in which the financial regulation was introduced. Research limitations/implications The results extend theoretical debate on financial regulation in sports leagues by moving beyond the assumption that financial regulation is a “technical exercise” to provide an alternative way of thinking about financial regulation as a “legitimising exercise”. Originality/value This is the first study to assess the impact of financial regulation for football league clubs over a longitudinal period. It is also extends previous research in which only single aspects of the financial sustainability of football clubs, such as insolvency, have been considered.

In the 1990s, banks’ capital requirements calculated as a ratio of risk-weighted-assets became the main tool of regulatory strategies designed to ensure banking system stability. This was largely an accidental development. The first Basel Agreement, signed in 1988, established that internationally active banks should maintain an 8% capital/risk-weighted assets ratio, but the concerns behind the agreement were only secondarily related to financial stability.1 At the time, the regulatory structure created in the 1930s in the United States in reaction to the banking collapse was widely considered obsolete. Even many of those who recognized its effectiveness to support banking system stability in that country (and elsewhere, since much of that structure was copied by many countries) accepted that times had changed and demanded new approaches to bank regulation. Some authorities and academic economists, in fact, went further and argued that the whole building, created mostly during the Roosevelt years, was a mistake. Notions such as the efficient market hypothesis or the rational expectations hypothesis were taking root in the academic community, although not necessarily among policy- and rule-makers. If one accepted either of those hypotheses, it was hard to argue for the necessity of financial stability regulation. But the growing opposition to bank and financial regulation was not confined to ideologically motivated priests in the academic community.

In recent years, universities increasingly had to compete for talented students. Besides running other marketing activities, universities began to cooperate with local professional soccer clubs. However, there is missing evidence on the positive effects of such collaborations. One possible benefit of having a local professional soccer team in a city could be the attraction of new students. Although soccer is an important leisure activity, research insights into the relationship between professional soccer and the demand for studies are rare. In this context, we consider promotions and relegations of professional soccer clubs and their impact on student enrollment growth, since these events are exogenous and time variant leading to an exogenous change of local public goods, private goods and media attention. Focusing on public German universities, dynamic panel regressions show that promotions and relegations of the best local soccer club to the next higher or lower division significantly influence the number of student enrollments in the upcoming semester. This effect is mainly driven by exceptional promotions and relegations. Moreover, student growth is affected by other external shocks on the education system such as double graduation or the status of being an “elite university”. Surprisingly, research funds and tuition fees were found to have no effect. The results provide considerable insights for decision makers, signifying that the sporting performance of professional local soccer clubs might affect enrolment decisions and could be used as an indicator for predicting the expected number of upcoming student applications or serve as an additional instrument in marketing campaigns and recruiting activities of a university.

A useful starting point for this discussion may be the acknowledgment of some key features of the Brazilian Financial System (BFS): i. The BFS is a bank-based system, led by financial conglomerates organized around large public and private banks; ii. Large banks are organized as universal banks (called multiple banks) but there are two other important segments in the banking system: stand-alone investment banks and medium/small banks. Investment banks deal with securities markets, asset management, derivatives, MA iii. Contrary to other experiences with high inflation, the BSF actually thrived during the about 25 years in which the Brazilian economy exhibited sustained rapid rates of price increases, since the late 1960s to the mid-1990s. The survival, and more than that, actually strong performance of the banking segment of the financial system in the period is due to a combination of factors: widespread indexation, which prevented dollarization and the flight toward dollar-denominated financial assets that could not be created or managed by domestic financial institutions; permanent availability of high-yield financial assets, in the form of public debt securities to sustain profitability for the financial industry and to remunerate investors; the innovative drive of banking firms, particularly in relation to payments systems, which strengthened the use of demand deposits by clients worried with the effect of high inflation on the real value of “in-transit” deposits; legal restrictions on the domestic expansion of foreign banks; iv. the ample availability of public debt securities, protected against practiBrazilian Journal of Political Economy, vol. 31, no 5 (125), pp. 858-862, Special edition 2011

Abstract: This book presents an in-depth analysis of how artificial intelligence (AI) is transforming financial technology (FinTech) by automating fraud detection and enhancing financial risk management. It builds upon foundational concepts in machine learning, deep learning, and natural language processing to develop an interdisciplinary framework that integrates computational finance, regulatory technology, and ethical governance. The central problem addressed is the increasing complexity and scale of fraud and risk in digital financial ecosystems, which traditional systems struggle to detect and mitigate in real time. Using a combination of algorithmic modeling, comparative analysis, and real-world case studies, the book explores both supervised and unsupervised AI techniques deployed in fraud detection, including anomaly detection, behavioral modeling, and adversarial resilience. It also investigates how deep learning architectures support real-time credit risk profiling and portfolio risk forecasting. Methodologically, the book synthesizes quantitative model performance evaluation with regulatory compliance assessment, drawing from international standards such as the EU AI Act and Basel Committee principles. Key findings highlight the superior adaptability, precision, and scalability of AI-based models compared to traditional rule-based systems. However, the book also critically evaluates ethical concerns, legal constraints, and data governance challenges. By proposing a future-oriented governance and design framework, this work provides actionable insights for financial institutions, regulators, and researchers aiming to implement responsible AI in high-stakes financial environments. The analysis offers a rigorous foundation for aligning technological innovation with robust financial integrity and regulatory resilience. Keywords: Artificial Intelligence, FinTech, Fraud Detection, Financial Risk Management, Machine Learning, Deep Learning, Regulatory Technology, RegTech, Anomaly Detection, Credit Scoring, Risk Modeling, Compliance Automation, Algorithmic Governance, Financial Ethics, Explainable AI, Federated Learning, Systemic Risk, Data Privacy, AML, KYC, Financial Regulation