Wayne Byres, Secretary General, Basel Committee on Banking Supervision (BCBS) described financial market participants as “glass half full” people, and regulators as their “glass half empty” counterparts. The reason for such description is that market participants will first see opportunity for reward whereas regulators will first see exposure to risk.
The two perspectives are different sides of the same coin and are essential for development of financial markets and, by extension, development of the real economy. The operation of an efficient financial sector is dependent on efficient financial regulation. The recent financial crisis has amply demonstrated the need for effective regulation. 3.