FinReg: a history

My latest article for Research magazine: "The Rise of the Regulators." Excerpt:

The 1913 Federal Reserve Act, creating a central bank and lender of last resort, marked a major step-up in federal involvement in the financial sector (expanding the previous role initiated by Civil War legislation that had allowed nationally chartered banks and set up the Office of the Comptroller of Currency). But Washington’s focus still was on stabilizing banks and the dollar, not on overseeing stocks and bonds.

The securities business thus remained lightly regulated overall through the Roaring Twenties. Industry touted its ability to self-regulate, as it had done since the 1790s by fixing brokers’ commissions. In 1922, the New York Stock Exchange imposed capital requirements on its member firms. Amid prosperity and rising stock prices, there was little public or political pressure for a tighter regulatory regime. Soon there would be.

Whole thing here.