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From semiconductors to electric vehicles, governments are identifying the strategic industries of the future and intervening to support them – abandoning decades of neoliberal orthodoxy in the process. Are industrial policies the key to tackling twenty-first-century economic challenges or a recipe for market distortions and lower efficiency?
Why have some countries chosen to create a single national financial services regulator? Four reasons predominate:
First, market developments - say, the increasing number of financial conglomerates and the blurring of boundaries between financial products - make sector-based regulation increasingly less viable. Most countries see cross-sector mergers and acquisitions in the financial services industry; and financial services firms expand through internal growth into new business sectors.
Indeed, groups that include some combination of banking, insurance, securities and fund management activities are increasingly common. Moreover, complex products that enable firms to unbundle, repackage and trade risks in ways that blur the boundaries between formerly distinct sectors are introduced consistently.
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