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Every financial crisis triggers some regulatory and supervisory changes related to the ensuing threats. These regulations usually address specific types of risks and reduce them but do not protect the entire system from another crisis. The aim of this study was to develop a conceptual framework of financial system resilience based on the theoretical approach of complex system theory and its explanation of these systems' self-adaptation. Our analysis embraces the time since the 2008+ financial crisis in the United States. We argue that the digitalization of financial markets may contribute to the greater safety of the banking sector. We adopted blockchain technology for the pattern of self-modification mechanisms of the financial system. The main findings highlight that the blockchain technology incorporated into the system approach and applied to financial regulation and supervision can significantly improve the safety of the financial markets.

The financial crisis led to a number of new systemic risk measures and a renewed concern over the risk of contagion. This paper surveys the systemic risk literature with a focus on the importance of contributions made by those emphasizing a network-based approach, and how that compares with more commonly used approaches. Research on systemic risk has generally found that the risk of contagion through domino effects is minimal, and thus emphasized focusing on the resiliency of the financial system to broad macroeconomic shocks. Theoretical, methodological, and empirical work is critically examined to provide insight on how and why regulators have emphasized deregulation, diversification, size-based regulations, and portfolio-based coherent systemic risk measures. Furthermore, in the context of network analysis, this paper reviews and critically assesses newly created systemic risk measures. Network analysis and agent-based modeling approaches to understanding network formation offer promise in helping understand contagion, and also detecting fragile systems before they collapse. Theory and evidence discussed here implies that regulators and researchers need to gain an improved understanding of how topology, capital requirements, and liquidity interact.

The digitalization of products and services on the financial market creates new challenges for public authorities administering this area. The Polish Financial Supervision Authority (PFSA) has been legally obliged to take care of the security of the market and at the same time support the innovation of it. Currently, innovation is strongly related to digitalization. This means that the PFSA has had to find legal and organizational solutions to fulfil these obligations. This article presents an argument indicating the contradiction between security and innovation. It then discusses solutions that allow the maximization of both security and innovation in the financial market. These solutions were developed in the administrations of highly developed financial markets and have already been transferred or can be transferred to the practice of the PFSA. On the basis of the British solutions, the article gives the examples of and discusses the most important solutions, collectively referred to as special regulatory institutions for innovation, i.e. innovation hubs, regulatory and digital sandboxes and innovation pathways.

This study investigates how three regulatory reforms undertaken in the aftermath of the global financial crisis have affected returns of real estate companies. The three reforms are aimed at regulating different segments of the market – Basel III targets banks, and could restrict the availability of bank debt to the sector; the Alternative Investment Fund Management Directive (AIFMD) targets funds, which could increase compliance costs and reduce the potential investor pool; the European Market Infrastructure Regulation (EMIR) is aimed at derivative trading and could impact the cost of debt capital. We employ an event study methodology using daily stock returns of real estate companies and identify the regulatory events through news published in major international financial newspapers and news agencies. Our results show different responses across the three regulations. For Basel III we find support for the regulatory burden hypothesis of the bank lending channel for small real estate firms and firms with low debt-to-equity ratios as they cannot diversify their funding sources. The direct regulatory effect as tested using AIFMD announcements supports the profit-based reaction hypothesis for large firms. We also show that the news have asymmetric effects with tighter regulation news more frequently leading to significant responses in average abnormal returns (AARs) than loosening regulation news.

The West African Economic and Monetary Union (WAEMU) regional securities market saw increasing activity in the last decade, but still fell short of supplying sufficient long-term financing for growth-enhancing public and private investment projects. In addition to providing an institutional background, this paper studies recent developments and the determinants of interest rates on the market-using yield curve and principal component analyses. It also identifies challenges and prospective reforms that could help the region reap the full benefits of a more dynamic securities market and assesses the potential systemic risk the market may pose for the region's banking system.

Today, legislators, courts, financial regulators and other actors at the EU and national level face major new challenges in safeguarding public and private interests in an increasingly digital and sustainability-minded environment surrounding financial markets. Innovative ways of addressing tensions between the common good and the individual preferences of market actors are needed to address these challenges. However, at present, the efforts to develop workable solutions are seriously hampered by the gap between the two areas of law that profoundly shape the financial markets—financial regulation and private law—in the current European policy discourse and legal scholarship. This article is an attempt to systematically rethink the role of private law in the regulatory and enforcement landscape for financial markets and its relationship with public regulation more generally. It argues that financial regulation and private law are not two parallel universes, but rather two sides of the same coin, each of which has a critical role to play in safeguarding public and private interests. Examining EU financial regulation through the ‘private law’ lens would enable us to unveil a complex interplay between the regulatory dimension, contractual settings and private law remedies that we need to better understand in order to be able to better regulate financial markets. Conversely, examining national private law through the European ‘regulatory’ lens would allow us to unpack the potential of traditional private law to contribute to the objectives of EU financial regulation, while at the same time realising justice between private parties.

Purpose Currently, consumers of financial products and services have become more vulnerable to predatory financial institutions, especially in the aftermath of Covid-19 pandemic. Therefore, financial consumers like the persons with disabilities (PWDs) should be equipped with knowledge and skills to help them to evaluate complex financial products on offer in financial markets, especially in developing countries to avoid being victims of fraudulent lending. The purpose of this study is to establish whether customized financial literacy mediates the relationship between financial consumer protection and financial inclusion of PWDs’ owned MSMEs in rural Uganda post Covid-19 pandemic. Design/methodology/approach SmartPLS 4.0 was used to construct the measurement and structural equation models to test whether customized financial literacy significantly mediates the relationship between financial consumer protection and financial inclusion of PWDs’ owned MSMEs in rural Uganda post Covid-19 pandemic. Findings The results revealed a partial mediating effect of customized financial literacy in the relationship between financial consumer protection and financial inclusion of PWDs’ owned MSMEs in rural Uganda post Covid-19 pandemic. Conducting customized financial literacy increases financial consumer protection by 12 percentage points to promote financial inclusion of PWDs’ owned MSMEs in rural Uganda post Covid-19 pandemic. Research limitations/implications This study focused only on customized financial literacy and financial consumer protection to promote universal financial inclusion of PWDs’ owned MSMEs post Covid-19 pandemic. Future studies may use data collected from other vulnerable groups amongst the unbanked population in developing countries, Uganda inclusive. In addition, this study also collected only quantitative data from the selected population. Further studies can be conducted using key informant interviews and focused group discussion to get the perceptions of the PWDs on being protected from exploitation by unscrupulous financial institutions. Practical implications The findings from this study can help policymakers in developing countries like Uganda to revise the existing consumer protection law to include strong clauses on protection of people with special needs like the PWDs. The law must ensure that they are not exploited by financial institutions because of their conditions. The law ought to make sure that the PWDs are educated about their rights in the financial market place and all information on financial products offered by financial institutions should be simplified and interpreted to them before they make consumption decisions. Originality/value To the best of the authors’ knowledge, the present study is amongst the first few studies to provide a meticulous and unique discourse on the ever increasing role of financial literacy combined with consumer protection to reduce consumption risks within the financial markets, especially in developing countries in the aftermath of global pandemic shocks. This study uses the social learning theory, theory of reasoned action and theory of planned behaviour to elucidate how customized financial literacy can enhance consumer protection to increase financial inclusion of groups with special needs like the PWDs who have become more susceptible to exploitation by unscrupulous financial institutions in under-developed financial markets, especially in post Covid-19 pandemic.

Security token offerings (STOs) are transforming financial markets by providing a regulated alternative to speculative initial coin offerings (ICOs) and bridging traditional finance with blockchain technology. Despite their potential, the STO industry faces challenges in fostering a sustainable ecosystem. This study explores critical factors and interactions within the STO industry by incorporating perspectives from platform operators, custodial institutions, regulatory authorities, and investors. Through in-depth interviews with 15 stakeholders and a causal loop diagram analysis, the authors identify key issues, including the need for competitive STO products, an active distribution market, balanced innovation and investor protection, and risk mitigation for unregulated sales. Based on these findings, they propose targeted strategies to address these challenges, offering practical and theoretical insights into the STO ecosystem and its sustainable growth.

'Investor Protection and Corporate Governance' analyzes the impact of corporate governance on firm performance and valuation. Using unique datasets gathered at the firm-level—the first such data in the region—and results from a homogeneous corporate governance questionnaire, the book examines corporate governance characteristics, ownership structures, dividend policies, and performance measures. The book's analysis reveals the very high levels of ownership and voting rights concentrations and monolithic governance structures in the largest samples of Latin American companies up to now, and new data emphasize the importance of specific characteristics of the investor protection regimes in several Latin American countries. By and large, those firms with better governance measures across several dimensions are granted higher valuations and thus lower cost of capital. This title will be useful to researchers, policy makers, government officials, and other professionals involved in corporate governance, economic policy, and business finance, law, and management.

This paper assesses the impact of legal trades by corporate insiders on the liquidity of the firm’s stock. For this purpose, we analyze two liquidity measures and one information asymmetry measure. The analysis allows us to study as well the effect of a change in insider trading regulation, namely the implementation of the Market Abuse Directive (European Union Directive 2003/6/EC) on the Dutch stock market. The first set of results shows that, in accordance with theories of asymmetric information, the intensity of legal insider trading in a given company is positively related to the bid-ask spread and to the information asymmetry measure. We also find that the Market Abuse Directive did not reduce significantly this effect. Secondly, analyzing liquidity and information asymmetry around the days of legal insider trading, we find that small and large capitalization stocks see their bid-ask spread and the permanent price impact increase when insiders trade. For mid-cap stocks, only the permanent price impact increases. Finally, we could not detect a significant improvement of these results following the change in regulation.