Financial services--and the firms that provide them--have for centuries been regulated to a greater extent than are most products that do not directly affect people's health or safety. In this illuminating overview, George Benston explains why.

After describing the problematic aspects of the current regulatory system, which is costly and unfriendly to consumers, he offers thoughtful and practical proposals for its revision. These include the removal of almost all specific regulations affecting financial-services firms, markets, and products, with the principal exception of a high relative capital requirement--which can be met with both equity and subordinated debt--to protect government-insured deposits and some insurance beneficiaries. The system Benston proposes would benefit taxpayers and consumers and impose almost no cost on prudently run firms.

George J. Benston is the John H. Harland Professor of Finance, Accounting, and Economics at the Goizueta Business School and professor of economics in the College of Liberal Arts and Sciences at Emory University. He has published more than one hundred books, monographs, and articles on banking and finance, accounting, and other aspects of economics.