# Financial regulation `kaal:entity:financial-regulation` **Status.** derived This node is assembled mechanically from the 22 claims that carry the concept tag `financial-regulation`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 22 claims across 12 works, 2012 to 2024. **2012** - [1998455-025](https://wulfkaal.github.io/claims/1998455-025) [predictive/argued] -- The political economy of financial regulation ensures that the expansion of regulatory oversight induced by Dodd-Frank will be followed by a phase of relaxation, since historically the introduction of regulatory regimes after a crisis is followed by a gradual easing of regulatory strictures. > The political economy of financial regulation ensures that af- ter the Dodd-Frank-induced expansion of regulatory oversight there will be a subsequent phase of relaxation of regulatory over- sight. Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [2029983-007](https://wulfkaal.github.io/claims/2029983-007) [failure/argued] *(failure mode)* -- Harmonization can fail on the merits: the harmonious rule may be the wrong rule for the problem it addresses, or it may become the wrong rule later as circumstances change. > "harmonious" rule may be the wrong rule for solving a particu- lar problem, or the rule could become wrong later based on changing circumstances. Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983 **2013** - [2267560-036](https://wulfkaal.github.io/claims/2267560-036) [empirical/evidenced] *(failure mode)* -- Rules, especially in financial regulation, are mostly enacted when it is politically opportune rather than when appropriate information for rulemaking is available. > Financial crises throughout history (Rheinhart and Rogoff 2011) have demonstrated that rules are mostly enacted, especially in the context of financial regulation, when it is politically opportune (Coffee 2012), not when appropriate information for rulemaking is available. Wulf A. Kaal, Evolution of Law Dynamic Regulation in a New Institutional Economics Framework (2013). SSRN: https://ssrn.com/abstract=2267560 - [2273857-001](https://wulfkaal.github.io/claims/2273857-001) [failure/asserted] *(failure mode)* -- Governance adjustments enacted via stable rules in reaction to financial crises are inevitably followed by relaxation, revision, and retraction of those rules. > Governance adjustments via stable rules in reaction to financial crises are inevitably followed by relaxation, revision, and retraction. Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857 - [2273857-002](https://wulfkaal.github.io/claims/2273857-002) [mechanism/argued] -- Because economic conditions and the corresponding requirements for optimal and stable rules are constantly evolving, a rule set that is optimal at enactment ceases to be optimal over time. > The economic conditions and the corresponding requirements for optimal and stable rules are constantly evolving, suggesting that a different set of rules could be optimal. Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857 - [2273857-006](https://wulfkaal.github.io/claims/2273857-006) [failure/argued] *(failure mode)* -- The existing literature on financial regulation has not adequately addressed the underlying causes and consequences of cyclical regulation. > The literature on financial regulation may not have addressed the underlying causes and consequences of cyclical regulation adequately. Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857 - [2273857-008](https://wulfkaal.github.io/claims/2273857-008) [empirical/argued] -- Congress, financial regulators, and the financial regulation literature rely almost exclusively on rules presumed to be stable and optimal, which is the common denominator of regulatory responses to crises. > Congress, financial regulators, and the literature on financial regulation rely almost exclusively on "stable" and presumptively "optimal" rules. Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857 - [2273857-028](https://wulfkaal.github.io/claims/2273857-028) [definitional/asserted] -- The regulatory sine curve is the pattern of governance adjustments made in reaction to financial crises together with the inevitable relaxation, revision, and retraction of the rules enacted as part of that adjustment. > The regulatory sine curve describes governance adjustments in reaction to financial crises and the inevitable relaxation, revision, and retraction of rules that were enacted as part of the governance adjustment. Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857 - [kaal-2013-acomparativeperspectiveo-028](https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-028) [mechanism/argued] *(failure mode)* -- Following enactment, governance adjustments are often later repealed or diluted, and anticipation of future developments plays no significant role in the top down approach to regulation. > Worse yet, following the enactment, governance adjustments are often later repealed or diluted. 41 Anticipation of future developments and pre-emption of possible future crises does not play a significant role in the top down approach to Kaal, A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax (2013) - [kaal-2013-acomparativeperspectiveo-029](https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-029) [mechanism/argued] *(failure mode)* -- The economic conditions and the corresponding requirements for optimal and stable rules are constantly evolving, so rules fixed at one moment lose their fit over time. > However, the economic conditions and the corresponding requirements for optimal and stable rules are constantly evolving. Kaal, A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax (2013) - [kaal-2013-acomparativeperspectiveo-031](https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-031) [design/argued] -- The shortcomings of stable rules, especially the perpetual need for rule enactment and revision, justify a supplemental dynamic approach to regulating the financial industry that enhances and extends the established regulatory framework rather than replacing it. > The shortcomings of stable rules, especially the perpetual need for rule enactment and revision, could justify a supplemental dynamic approach to regulating the financial industry.43 Dynamic regulation would not replace the established regulatory framework but could enhance and extend it. Kaal, A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax (2013) - [kaal-2013-acomparativeperspectiveo-032](https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-032) [definitional/asserted] -- Dynamic Regulation is defined as an adapting governance mechanism that is constantly evolving and adjusting to the given market environment, financial innovation, and regulatory environment. > 1.) Dynamic Regulation suggests an adapting governance mechanism that is constantly evolving and adjusting to the given market environment, financial innovation, and the given regulatory environment; Kaal, A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax (2013) **2014** - [2389423-032](https://wulfkaal.github.io/claims/2389423-032) [empirical/evidenced] -- The results contradict other studies finding an inverse relationship between the size of regulated firms and the per-unit cost of compliance, and suggest that financial regulation does not bring increasing returns to scale in the private fund industry. > contradict other studies that find an inverse relationship between the size of regulated firms and the per-unit cost of compliance. The results suggest that financial regulation does not bring increasing returns to scale in the private fund industry. Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 - [2389423-033](https://wulfkaal.github.io/claims/2389423-033) [empirical/argued] -- Financial regulation has disparate effects on private fund advisers in comparison with other financial services providers, so evidence of scale economies in compliance drawn from banking does not transfer to private funds. > Financial regulation has disparate effects on private fund advisers in comparison with other financial services providers. Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 - [2389423-034](https://wulfkaal.github.io/claims/2389423-034) [empirical/argued] -- The results suggest that the private fund industry may be more robust and less affected by financial regulation than other financial services providers. > The results suggest that the private fund industry may be more robust and less affected by financial regulation than other financial services providers. Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 **2016** - [2816408-001](https://wulfkaal.github.io/claims/2816408-001) [empirical/asserted] -- Title IV of the Dodd-Frank Act of 2010 is the most significant regulatory change in the history of the private fund industry, ending decades in which the industry operated with little regulatory supervision. > Title IV of the Dodd-Frank Act of 2010 introduced the most significant regulatory change in the history of the private fund industry. Wulf A. Kaal, Barbara Luppi, Sandra Paterlini, Did the Dodd-Frank Act Impact Private Fund Performance – Evidence from 2010 – 2015 (2016). SSRN: https://ssrn.com/abstract=2816408 **2017** - [2834531-045](https://wulfkaal.github.io/claims/2834531-045) [predictive/speculative] -- The flexible, data based, sandbox style regulatory approach already adopted in the financial industry is expected to expand into other areas of innovation and technology. > This regulatory approach is already adopted in the financial industry. It is only to be expected that this trend will expand to other areas Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Regulation Tomorrow What Happens When Technology Is Faster Than the Law (2017). SSRN: https://ssrn.com/abstract=2834531 - [2957645-001](https://wulfkaal.github.io/claims/2957645-001) [design/asserted] -- Contingent capital securities are a largely overlooked dynamic regulatory mechanism, and their regulatory value lies in their capacity to generate feedback effects, optimized timing, and improved information for regulation. > Contingent capital securities are a largely overlooked dynamic regulatory mechanism. Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645 - [2957645-003](https://wulfkaal.github.io/claims/2957645-003) [failure/argued] *(failure mode)* -- Formal rulemaking in the existing regulatory infrastructure is too time consuming, and the speed of product innovation frequently renders regulations pertaining to an innovative product obsolete before those regulations are even finalized. > Formal rulemaking in the existing regulatory infrastructure is overly time-consuming7 and the speed of product innovation often makes regulations pertaining to an innovative product obsolete before such regulations are finalized.8 Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645 - [3002908-003](https://wulfkaal.github.io/claims/3002908-003) [failure/argued] *(failure mode)* -- Regulatory uncertainty in this transitional era actively frustrates blockchain innovation rather than supplying the secure framework in which blockchain applications could flourish. > This uncertainty frustrates blockchain innovation instead of providing a secured framework where revolutionary blockchain applications can flourish. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 **2021** - [3808859-029](https://wulfkaal.github.io/claims/3808859-029) [predictive/argued] *(failure mode)* -- DeFi's disruptive potential may be blunted by incumbents: existing financial institutions can adopt decentralized technologies inside a controlled environment, capturing benefits such as transparency and interoperability while preserving centralized oversight. > The disruption through DeFi may be mitigated by existing financial institutions' attempts to leverage decentralized technologies in a controlled environment that allows the utilization of its benefits, such as transparency and interoperability, while also facilitating centralized oversight. Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859 **2024** - [4957318-017](https://wulfkaal.github.io/claims/4957318-017) [design/evidenced] -- Sunsetting performs best in crisis driven financial legislation, where it supplies a built in mechanism for reviewing and potentially repealing laws enacted under emergency conditions and thereby mitigates the harms of legislating under pressure. > Sunsetting can mitigate the potentially negative consequences of crisis-driven financial legislation, providing a built-in mechanism for reviewing and potentially repealing laws that were enacted under emergency conditions. Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/financial-regulation.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.