This podcast provides an overview of the complex relationship between financial innovation and regulation. While acknowledging the potential of financial innovation to enhance access to credit, improve risk management, and boost efficiency, the podcast underscores the need for robust regulation to counter the associated risks. It highlights the dangers of complexity, opacity, leverage, and regulatory arbitrage, all of which can contribute to market instability and jeopardize investor interests. The podcast then explores various regulatory tools used by national authorities, such as capital adequacy requirements, conduct of business rules, market surveillance, and resolution frameworks. Citing the Basel Accords, MiFID, and the Consumer Credit Directive as examples, it emphasizes the importance of a balanced approach that fosters innovation while mitigating risks. Finally, it touches upon the complexities brought about by Brexit, as the UK navigates the evolving landscape of financial regulation and its potential impact on innovation and competitiveness.

The podcast was prepared by NotebookLM on the basis of material curated by Dr Ioannis Glinavos.