Preface; Acknowledgements; About the Editors; Part I Special Addresses; Chapter 1 Financial Entropy and the Optimality of Over-regulation; Preview; I. Why Do We Have Finance? Why Do We Regulate It?; II. The Big Tradeoff: Less Mean for Less Variance; III. The Financial Entropy Theorem; Glass-Steagall; Interstate Banking; Derivatives; IV. The Optimality of Over-regulation; V. Appraising the Long-run Effects of Some Recent Reforms; Systemic Risk Regulation; Too-big-to-fail and Resolution Authority; Higher Capital Requirements; Restricting Proprietary Trading; Regulating Derivatives. Compensation IncentivesThe Need for International Harmonization; Summary; References; Chapter 2 Implementing the Regulatory Reform Agenda: The Pitfall of Myopia; Why we Shouldn't Back-track on Regulation; Are We There Yet? What are the Remaining Challenges?; Concluding Remarks; References; Chapter 3 A Financial System Perspective on Central Clearing of Derivatives; Further Challenges Facing Central Clearing; The Road Ahead: Meeting the Challenges; Liquidity; Transparency; Stress Testing; Skin in the Game; Recovery and Resolution; Conclusion: Realizing the Promise of Central Clearing. The Fed's Policy ResponsesDiscount-window Lending (DW); The Term Auction Facility (TAF); Central Bank Liquidity Swaps Program (CBLS); Single-tranche Open Market Operations (ST OMO); Term Securities Lending Facility (TSLF); Primary Dealer Credit Facility (PDCF); Assessing the Effects of Liquidity Facilities; Market Liquidity: The Commercial Paper Funding Facility (CPF); Which Institutions Received the Largest Amount of Liquidity Assistance?; Special Benefi ts for Special Institutions; Policy Concerns Shift From Illiquidity to Insolvency. Why Did the Regulatory Authorities Delay Recognition of the Solvency Problem for So Long?Concluding Comments; References; Chapter 6 Europe's Banking Union: Status and Prospects; The Inception of Europe's Banking Union; Banking Union Legislation, Institutions and Implementation Schedule; Economic Impact; Institutional Implications; Prospects for Future Policy Development; References; Part III Regulatory and Market Response to the Financial Crisis -- Capital Markets; Chapter 7 Capital Market Regulation in Japan after the Global Financial Crisis; Introduction; I. From Banks to Markets.