Introduction

The past few years have seen enormous change in US financial market regulation, with the specifics of some of the most radical changes, in the securities area, yet to be decided. This chapter explores US regulation of the insurance, banking, securities and futures trading sectors, and seeks to present this regulation in the broader context of US public law and politics, particularly as these factors affect recent developments.

US regulatory style

US financial regulation reflects the more general US political culture within which it is embedded, which with respect to law and regulation is arguably quite unique. Of the major developed economies, the United States probably displays the political culture most hostile to centrally imposed regulatory solutions to governance problems, and this extends to financial regulation. This hostility manifests itself in at least two ways. First, the US version of federalism leaves the individual states largely autonomous with respect to contract, commercial, and business organisation law, allowing the states a great deal of autonomy to regulate banking, securities, insurance, and other commercial activities within their borders. The US commitment to this style of federalism tends to cut against the occurrence of unified and exhaustive regulatory schemes imposed at the national level. States remain important players in financial market regulation, sometimes to the advantage of the regulated sector, sometimes not.