Limitations to state intervention in financial markets: discussion between the regulation and the deregulation

Abstract

Nowadays it is necessary to assign great importance to the role played by the financial market in the macroeconomic stability of a state, since it is closely linked with the development and growth of an economy. In particular, the focus is on the financial markets in times of economic crisis, in which governments are required, as a rule, to perform in front of them the maximum possible regulation, absenting from the stage the discussion against the need for state intervention. However in normal cycles, the role to play by the state is discussed, also the relevance of the regulation as opposed to deregulation.

The difference is considered to be settled in normal situations ratifying the necessary intervention in the financial markets, with a clear objective: to avoid systemic crises. Then what is believed to be discussed are the limits, means and scope of such intervention, and whether it should be ex ante or ex post. However, is also of interest the discussion against if such intervention should only take as a criterion to achieve market efficiency, or on the contrary could also pursue other objectives such as obtaining more welfare for citizens. This will be the thesis that seeks to develop in the following lines by addressing as a methodological order for it, (i) the study of the origin of state intervention from the political economy point of view and its scope, (ii) the utility of regulation or deregulation of the financial market (iii) As a proposal, the scope, means and goals of intervention of the state.