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Reputation and regulation

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Reputation Capital

Abstract

Where information asymmetries are inherent in markets, reputation serves as an enforcement mechanism. Regulation takes the task of informing participants of their counterparties’ standing by sending quality signals to support their reputation, thus allowing for efficient trade. Effective regulation creates expectations, which may force regulators to assume responsibility for the quality signals issued. The extent of both financial and reputational risk to which governments are exposed in financial markets requires strong regulation with clear rules for predictable intervention.

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Author information

Authors and Affiliations

  1. Private, Commercial and Corporate Law, University of Zurich (Ordinarius), Zurich, Switzerland

    Hans Caspar von der Crone

  2. Research Assistant to Prof. von der Crone, University of Zurich, Zurich, Switzerland

    Johannes Vetsch

Authors
  1. Hans Caspar von der Crone
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  2. Johannes Vetsch
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Editor information

Editors and Affiliations

  1. Pleon GmbH, Bahnstr. 2, Düsseldorf, 40212, Germany

    Joachim Klewes

  2. Pleon GmbH, Theresienhöhe 12, München, 80339, Germany

    Robert Wreschniok

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© 2009 Springer-Verlag Berlin Heidelberg

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von der Crone, H.C., Vetsch, J. (2009). Reputation and regulation. In: Klewes, J., Wreschniok, R. (eds) Reputation Capital. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-01630-1_12

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