Financial Regulation and the Lobbying Activities of the Financial Sector Carlo Panico and Antonio Pinto

The breakdown of the Bretton Woods’ agreements and the oil shocks of the Seventies, the paper argues, changed the management of financial firms. Flexible exchange rates created new opportunities for financial operations while inflation and the decision of the authorities to attribute high priority to it accelerated financial innovation. These phenomena led to a progressive growth of the turnover of the financial sector, which strengthened its weight in the economy and may have favoured the introduction of legislation reducing the ability of the authorities to prevent the rise of systemic risk.

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