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Measuring regulatory complexity
DOI:10.1016/j.jfineco.2025.104186.png)
Abstract
En 中文
We propose a framework to study regulatory complexity, based on concepts from computer science. We distinguish different dimensions of complexity, classify existing measures, develop new ones, compute them on three examples — Basel I, the Dodd–Frank Act, and the European Banking Authority’s reporting rules — and test them using experiments and a survey on compliance costs. We highlight two measures that capture complexity beyond the length of a regulation. We propose a quantitative approach to the policy trade-off between regulatory complexity and precision.
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