Mid Sweden University

Abstract

In the early 2000s, a new more effective type of financial regulation was discussed and implemented, the so-called principles-based regulation (PBR). PBR is a modern regulation better suited to the financial market’s rapid changes and product development than the classic type of regulation. The regulation means that the undesirable behaviors are listed in general principles, rather than to specify this in detail in advance. In this way flexibility is gained that gives authorizes some freedom to act retrospectively. Today, however, in the aftermaths of the financial crisis, many European countries want tighter regulation of financial markets. This is a documentary study of the PBR objectives and the underlying motives of England’s financial supervisory authority (FSA) in the years 1998-2012. The analysis shows that FSA’s targets are primarily economic rather than moral: increase market efficiency and reduce costs for financial firms and for the FSA, and this agenda seems superior to the consumer protection goal. The objective to “maintain confidence” means that the focus is on protecting the reputation of the financial industry and of the Financial Services authority. These kinds of goals and communication can have the opposite effect of undeservingly eroding the confidence in the new type of Principle Based Regulation. 

Purpose - The purpose of this paper is to shed light upon how retailers view alternative payment forms and to what extent they are willing to risk offending their customers by imposing payment restrictions. Design/methodology/approach - This exploratory study consists of three consecutive parts: first, 100 situations of paying for goods or services; second, interviews with 25 of these 100 retailers; and third, observations at a meeting between retailers and bank representatives on various aspects of card and cash payments. Findings - Retailers are unwilling to risk offending their customers and do not normally undertake any actions to affect the customers' choice of payment form, except for proactively or reactively excluding the use of certain expensive credit cards, and card payments for small amounts. The retailers only take the risk of causing customer dissatisfaction when they feel that the sacrifice for not doing so is too costly, and in these cases the salespersons act very late in the purchase process. Other aspects than payment costs (such as safety, time and environment) seem to have little impact on individual retailers' actions at the payment stage. Research limitations/implications - The present study focuses solely on the retailers' point of view on the payment stage, implying a need for additional research on customers' and bank representatives' views on the same matter. Practical implications - Retailers try to nurture their customer relationships also when they are proactive or reactive, i.e. by pointing to the high cost of a particular payment form and/or asking customers to help with small change. Sending signals that invite customers to assist may not only be a way to affect how customers pay, but also foster relationship development. Social implications - It seems that environmental costs have not filtered down to the firm level, at least not in an observable way. Any further move towards a "cashless society" has to emanate from other sources. Originality/value - No previous study has focused on the way selling companies approach their customers at the payment stage in terms of proactive, reactive and inactive behaviour.

This paper explores whether financial markets are games, using exchange traded derivatives, those quintessential speculative instruments, as the primary vehicle. The phrase “gaming the system” usually means taking advantage of the system; that is to say, specifically turning some-thing performing a productive social function to one’s own enjoyable ends. But “gaming the system” can also mean generally transforming a system with productive purposes into one whose purpose is enjoyment. Some might say that this is just what has occurred in recent years to financial markets with the explosion in derivatives.