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Loughborough University research into financial regulation has had a significant and enduring influence on how regulatory bodies are structured and how they use economic analysis. This work has been credited with shaping the groundbreaking culture and methodology of financial regulation in the UK with respect to consumer protection, recognising the special characteristics of retail financial products and contracts and applying cost-benefit and regulatory impact analysis in decision-making processes. It has also played a major role in redefining financial regulatory structure in the UK and South Africa. In addition, the research is now being used to help develop and guide approaches to ensuring high standards of bank regulation and consumer protection across the EU through the European Banking Authority's Banking Stakeholder Group.
Trade and finance are the lifeblood of the global economy. Research conducted within the International Political Economy (IPE) cluster has tracked changes in how trade and finance are governed. This case study demonstrates the impact of the IPE cluster on a range of beneficiaries including national governments, international organisations and non-governmental organisations. Via the £4.3M ESRC-funded Centre for the Study of Globalisation and Regionalisation (CSGR), members of the IPE cluster have influenced national economic policies, shaped policy debates on international regulatory regimes and informed the attempts of non-state actors to raise ethical standards in transnational corporate practices.
Research undertaken at the University of East Anglia (UEA) has identified whether consumers are likely to switch supplier, whether they are likely to get a good deal, and how companies are likely to respond to specific regulatory intervention. Such research findings challenge regulators to make better decisions. An appropriate regulatory framework leads to better decisions by consumers, helping markets to work better, and resulting in lower prices and bills. This is particularly critical in the energy and water sector, which are of crucial importance to each of the 25 million households in the UK, and where implementation of some of these research findings could lead to reductions of 6% in household energy bills (which translates to a total saving of over £2.1 billion a year).
Much contemporary government activity involves regulation of the economy and society. International organisations have increasingly promoted regulatory impact assessment as a tool to appraise the likely costs and benefits of regulations. Ground-breaking research by a team at the Centre for European Governance (CEG) has exposed the limitations of narrow economic approaches to regulatory impact assessment and regulatory reform. The research shows that impact assessment and regulatory measures need to be cast in their political and administrative context to operate effectively and to ensure appropriate cross-national learning about regulation. The main impacts have been:
Competition authorities (CAs) such as the Office for Fair Trading (OFT) are obliged to evaluate how their activities have benefited consumers. On the basis of his prior research in this area, Stephen Davies was invited to produce a public evaluation of methods used by the OFT to estimate the direct consumer benefits resulting from its competition enforcement. This is an obligation to HM Treasury and influences the allocation of resources to, and within, OFT. His published report (2010) has led to changes in OFT's methodologies and has been influential on CAs internationally. It also feeds into how OFT conducts future interventions.
LSE research on endogenous risk has had impact at both the macro and micro level. At the macro level, it provided input for the design of the counter-cyclical measures and systemic risk surcharges in the Basel III regulations in financial markets. It also provided a significant input to the G20 agenda on financial stability. At the micro level, the research has had a significant role in shaping the thinking and recommendations of the UK Foresight Report on "The Future of Computer Trading in Financial Markets". Through this, the work had a direct impact on Markets in Financial Instruments Directive (MiFID) II, the EU legislation that governs how EU financial service markets operate. The original EC proposal for trading halts in volatile markets — Minimum Resting Times (MRT) — to regulate high frequency trading was dropped and the Foresight proposal of time stamps based on synchronised atomic clocks across trading venues was adopted.
Dr Robert Falkner's research into international risk regulation for emerging technologies underpins the work of the Nanotechnology Policy and Regulation programme at LSE. On the basis of this work, Dr Falkner was tasked by the European Commission to lead the first ever comparative study of nanotechnologies regulation in the EU and US. This research has stimulated policy debates in the UK and Europe on how to strengthen regulatory capacity in the field of nanotechnologies. The research has highlighted, in particular, the importance of improved transparency about nanomaterials in consumer goods and supply chains. This research finding has influenced the conclusions of the first UK parliamentary enquiry into nanotechnologies regulation and has informed a recent shift in global policy debates towards comprehensive and mandatory nanomaterials registers.
Research by Surrey's Centre for International Macroeconomic Studies (CIMS) has had significant impact on monetary policy in several emerging economies.
This case study highlights impact in Nigeria and Pakistan. Both are important emerging economies: Nigeria is the second largest economy in Africa and ranks 30th by world GDP (adjusted for purchasing power parity), while Pakistan ranks 27th; yet GDP per capita is relatively low in both.
Since 2008, Surrey research has: (1) led to the establishment of a new Centre for Survey Research at the State Bank of Pakistan, collecting data that have directly influenced the Bank's monetary policy; (2) steered reform of the macroeconomic models used by the State Bank and the Central Bank of Nigeria; and (3) helped develop a new approach to monetary policy Nigeria.
Regulating telecommunications has been difficult for policy-makers, who must balance freedom for business operation with fairness and value for consumers. Termination rates — the cost of ending phone calls using other networks — have been particularly contentious.
Professor Valletti's work helped regulators, including Ofcom, to model the processes involved and thereby improve regulatory pricing guidelines.
By developing a new theory of regulation — how dynamic incentives price regulation — his research has influenced policy in both UK and international telecommunications markets.
Chang's research has covered a wide range of public policy, including industrial policy, trade policy, privatisation, and agricultural policy, as well as theories of state intervention. By successfully challenging the then prevailing orthodoxy on economic development, his research has had significant influence on the actions of many national governments, multilateral institutions (e.g., the UN, the World Bank) and NGOs (e.g., Oxfam). Chang's research has also had substantial impact on public debate concerning economic policies, especially but not exclusively those regarding development issues. He has had two best-selling mass-market books (together sold 1.15 million copies as of December 2012) and gained worldwide media exposure for his views.