Macroprudential versus monetary blueprints for financial reform

New books by Avinash Persaud and Morgan Ricks present very different blueprints for financial reform. Persaud builds upon the macroprudential programme to advocate a role for regulators in shepherding risk throughout the financial system. Ricks rejects the direction taken by post-financial crisis regulation, offering a blueprint that addresses the panic-prone nature of money creation in shadow banking. This review article provides a reading of their books which demonstrates how their evaluations of the global financial crisis shape their policy prescriptions. It also suggests that although their blueprints are valuable thought experiments they have a number of lacunae which economic sociologists and political economists can help fill. In particular, I argue that questions concerning regulatory epistemology, the politics of regulatory reform, and simplicity versus complexity in regulatory rule-making might orient a productive empirical and conceptual research agenda.