Wall Street and Regulation Summary

Wall Street and Regulation

WALL STREET AND REGULATION is a collection of five papers presented at a Harvard Business School colloquium in 1986, with an introduction and conclusion by the editor. The essays are arranged to as to present a chronological overview of the subject, starting with the advent of free banking in 1837, focusing sharply on the Franklin D. Roosevelt era of regulation and the Ronald Reagan era of deregulation, and concluding with a look into the uncertain future.

The historical aspects of the book are less the uncertain future observations on the contemporary scene. In general, the authors agree that, while government regulation was needed in the 1930’s, government deregulation under Reagan was also needed because world economic conditions as well as political conditions had changed so dramatically. They are aware of the abuses which may have changed their names since the 1920’s but which have retained their essential character -- abuses such as pressure selling, churning, inadequate disclosure, and insider trading. These scholars maintain, however, that self-policing and not re-regulation is what is needed at this time.

In the words of the editor, who is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School, “We do not think that an extensive bureaucracy (which is inevitably influenced by short-term political imperatives) can be relied on to do a better job than a free and open market in channeling the activities of financial intermediaries and, ultimately, the flow of capital resources.”

As might be expected from such a distinguished group of contributors, the essays require an intelligent reader’s close attention. The book is thoroughly documented and liberally embellished with tables and graphs. It will repay close study because it offers a thorough grounding on issues that ultimately affect everyone’s life.