ABSTRACT
Piero Sraffa's approach to monetary problems allows one to consider financial regulation as a set of norms influencing the terms at which credit is provided and the conventions over the distribution of income. Sraffa's approach can also be used to evaluate how the reactions to the recent financial crisis have affected the evolution of financial regulation. This approach leads one to argue that the change from a discretionary to a rules-based regime of regulation, as occurred after 1970, reflects technical considerations on how to solve the problems of liquidity and solvency of financial firms and the pressures of the financial industry to obtain legislation promoting its interests. The analysis of the recent financial crisis along the Sraffian perspective underlines the need to defend the independence of the authorities that decide and implement the rules of financial regulation. The conversion to the new regime was gradual and reflected the strengthening position of the financial industry in the economy and the society.
