ABSTRACT
In new democracies a major question with respect to party regulation is how it was formed in the first place. Its performance in the long run can be evaluated based on how well it complies with the intentions and expectations of the rulers and on its stability and endurance. The chapter aims to answer some questions with the argument that in Hungary the early regulation after serving the "insiders'?" for some time has eventually failed and an apparently new institutional design is being formed. It argues that the actors' context and, the initial institutions' performance have altered substantially. In this process three phases of the regulatory framework can be identified: creation, failed adaptation and then the phase of restructuring. The chapter discusses financial regulation as this proves to be the most influential and the most frequently targeted part of the regulatory framework. It summarizes the reasons of institutional failure and the shortcomings of the new regulation.
