The role of trust in Financial Regulation

The financial and economic crisis that started in 2008 let to a significant loss of trust in financial markets and financial institutions.
This is partly due to the perception that profits are privatized, while losses are socialized, as governments and, ultimately, taxpayers have repeatedly borne the burden of failed banks.
But without trust, financial markets cannot function efficiently.
So, trust and integrity depend to an important degree on the reputation of financial markets in order to generate reliable valuations of companies and business ventures.
Key elements to focus on to boost confidence in the banking system include better investor protection. And this in turn puts the spotlight on the role of the gatekeepers of the public trust, in particular, supervisors and regulators.