Raghuram G. Rajan
When it comes to managing new technologies and financial innovations, the United States tends to regulate too little, too late, whereas the European Union does too much, too soon. Neither gets the balance quite right, which is why the world may be best served if US and European regulators keep pulling in different directions.
CHICAGO – The problem with European regulators, a German businessman recently told me, is that they are too scared of downside risks. “In any innovative new business sector, they overregulate and stifle any upside potential.” In contrast, he argued, Americans care more about the upside potential, and thus hold off on regulation until they know much more about the consequences. “Not surprisingly, the United States has much more of a presence in innovative industries.”
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