Wasting a Crisis: Why Securities Regulation Fails

This is a book review of Paul Mahoney’s new book, Wasting a Crisis:Why Securities Regulation Fails, Chicago: The University of Chicago Press, 2015.

The book is an excellent treatment and critique of the market failure narrative on financial reform with a focus on the New Deal securities statutes. Mahoney employs to great effect standard event studies in concluding that in nearly all cases, the market failure narrative is incorrect by pursuing politically expedient objectives in lieu of regulation that remedies an actual problem. Mahoney’s convincing empirical analysis is a significant contribution to the literature on financial market reform, most of which accepts the market failure thesis.