Why Do We Regulate Banks?

6 Pages Posted: 14 Jan 2006

See all articles by Peter J. Wallison

Peter J. Wallison

American Enterprise Institute (AEI)


There is little reason, from an economic perspective, for banking regulation. Incentives exist, or can be created through private systems, to protect against the risks that are usually cited in defense of banking regulation. Moreover, the private systems would remove much of the cost and risk created by current government oversight. This suggests that the only reason we regulate banks is because we want to, not because we have to.

Keywords: Banking, banking regulation, private banking, private banking system, banks

JEL Classification: E42, E62, G21, G28

Suggested Citation

Wallison, Peter J., Why Do We Regulate Banks?. Regulation, Vol. 28, No. 4, pp.14-19, Winter 2005, Available at SSRN: https://ssrn.com/abstract=875361

Peter J. Wallison (Contact Author)

American Enterprise Institute (AEI) ( email )

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