Complexity of financial regulation is exploding. The underlying causes are still not addressed. Instead, regulators want to use technology to keep the inextricable regulatory framework under control – an approach that is doomed to fail.
“The Dog and the Frisbee”: This was the title of a speech by Andrew Haldane. Already a few years ago, the economist of the Bank of England complained about the ever growing complexity of financial market regulation. He used the image of a dog who wants to catch a Frisbee. The exact calculation of the trajectory requires an understanding of complex physical relationships. Nevertheless, a Border Collie is quite good in catching the flying disc. The dog just follows simple rules of thumb.