Addressing The Financial Crisis: The EU's Incomplete Regulatory Response
The financial crisis revealed numerous shortcomings in the regulation and supervision of the financial sector. In order to avoid similar crises - or at least limit their magnitude - there has grown international consensus to increase public involvement in the financial sector. Major international reports identified several gaps in the financial regulatory framework. In a nutshell, financial products have grown in complexity. Coupled with their opaque trading, this has resulted in an inadequate apprehension and spreading of risks. This was further aggravated by an overreliance on deficient risk assessment by others, notably credit rating agencies.