A Preliminary Look at State Structures for Regulating Financial Services

Within the past thirty-five years approximately fifty nations have consolidated their financial regulatory agencies into either a single integrated agency or into two semi-integrated agencies. The United States has resisted this trend, due in part to a concern that the costs of such significant consolidation would exceed its benefits. The existing studies that compare the costs of the consolidated regulators around the world with the United States regime have often been discounted because they have been unable to control for differences in culture and regulatory intensity between those other countries and the United States. This article attempts to address this problem by examining the costs of six different regulatory structures used by states within the United States, which range from separate agencies for each financial services industry to a single agency that regulates all financial services. As a result, this study provides a better picture of whether consolidation within the United States might result in any cost savings