Regulation of financial markets in international context

This diploma thesis comprises a theoretical, descriptive, comparative and econometric analysis of financial markets regulation in international context. In the first chapter I describe and analyse characteristics of modern financial markets, reasons for their regulation and institutional models of financial regulation and supervision. The second chapter offers an overview of the historical development of financial regulation and evaluates the role of regulatory factor in the outburst of the world financial crisis of 2008. In the third chapter I carry out a comparison of regulatory response to financial crisis in the USA and the EU. Forth chapter deals with regression analysis of the relation between Financial Soundness Indicators of three selected countries. The conclusions driven from this diploma thesis demonstrate that regulation is generally effective as a remedy for market failures, but in other aspects its effects are ambiguous. Intensity of regulation is a secondary impact factor in the formation of financial crises, in fact it is more reasonable to state that crises occur because of the failure of supervision rather than regulation. Due to the international attempts to harmonise the process of remediation of the consequences of the financial crisis, the regulatory response in the USA and the EU was very similar. Statistical analysis did not confirm the common idea that regulation represents a significant barrier for increasing the profitability of credit institutions.