Regulation, Deregulation and Financial Crises

Abstract

The tendency to deregulate financial markets and institutions is driven by strong belief in laissez-faire, the free-market doctrine. In general, this doctrine implies a structure whereby the production, distribution and pricing of goods and services are coordinated by the market forces of supply and demand, unhindered by regulation and government intervention. An economy that is composed entirely of free markets is referred to as a free-market economy. The origin of the concept of a free market is traced by Gray (2009) to mid-nineteenth century England.