Amongst other goals, this paper aims to address complexities and challenges faced byudregulators in identifying and assessing risk, problems arising from different perceptions ofudrisk, and solutions aimed at countering problems of risk regulation. It will approach theseudissues through an assessment of explanations put forward to justify the growing importance ofudrisks, well known risk theories such as cultural theory, risk society theory andudgovernmentality theory. In addressing the problems posed as a result of the difficulty inudquantifying risks, it will consider means whereby risks can be quantified reasonably withoutudthe consequential effects which result from the dual nature of risk, that is, risks emanatingudfrom the management of institutional risks.ud“Socio cultural” explanations which relate to how risk is increasingly becoming embedded inudorganisations and institutions will also be considered as part of those factors attributable toudwhy the financial environment has become transformed to the state in which it currentlyudexists.udA consideration of regulatory developments which have contributed to a change in the wayudfinancial regulation is carried out, an illustration of how the financial industry and theudapproach to financial regulation have been transformed by the rapid growth of the hedgeudfunds industry, will also constitute focal points of the paper.
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