Book Review: Structure and Regulation of Financial Markets

This book review is part of a series that covers the topic of Peak Performance. Though the term "peak performance" could apply to a number of different areas of self improvement, one thing is clear: Peak performance implies that the individual in question is operating at the top of his or her game. Dave Carpenter is the Official Guide to Peak Performance. Over a 25 year career in corporate restructuring, Dave became widely recognized as one of the leaders in this field. As a result, he has long been annually recognized as an honoree in Who’s Who in Law, and Who’s Who in Finance.nnThe Structure and Regulation of Financial Markets, by Peter D. Spencer, is a valuable resource for people interested in Peak Performance, and it is available through Amazon.com and Barnes & Noble.

nBook DescriptionnThis lucid text brings together and explains the main theoretical developments in economic thinking about financial markets, institutions, and regulations over the last twenty-five years. It relates the theory of asymmetric information to the main financial developments in the US, UK, and other Anglo-Saxon countries. After a preliminary discussion of financial markets and their transparency, it looks at the role of financial intermediaries such as banks. It argues that these institutions can compete with efficient markets because they are confidential. The book goes on to discuss bank credit rationing, bank failure and systemic risk, and the way in which regulation can control these risks.nnn"Financial textbook analyzes financial products from the perspective of information theory; explains why financial markets and institutions are prone to failure; and addresses how regulation can reduce the risk of failure and how legal and regulatory constraints help shape a country's corporate and financial structures. Discusses asymmetric information in financial markets; adverse selection in the market for retail financial services; the structure and regulation of insurance markets; capital-market microstructure and regulation; information revelation, transparency, and insider regulation; security research and regulation; the equity market and managerial efficiency; the theory of financial intermediation; moral hazard in the bank loan and public bond markets, excessive risk, and bank regulation; bank runs, systemic risk, and deposit insurance; bank regulation in practice; and financial structure and regulation.