Approach of scaling the level of government intervention in the financial market

Abstract

In the field of the economics’ regulation researchers so far have built the conceptual framework showing how the deadweight loss of market failures decrease and costs of the government intervention in-crease with the increased level of the government intervention. In order to quantify relationships between the level of intervention, intervention costs and the deadweight loss with econometric models it is im-portant to understand how to apply coordinates for the data points to be included in the modelling. The main goal of the research presented in this paper is to find the unit measure for the asis of the independentvariable, i.e. to shape the categorical scale corresponding to the level of intervention.

Methodology for the Assessment of Regulation Costs in the Banking Market

“…In order to validate the methodology authors combined the concept described in Figure 1 and the process described in Figure 3. Based on previously developed methodology (Freimanis & Šenfelde, 2020) authors have assessed the government intervention level in the countries of the European Union, the United Kingdom, the United States, Canada and Russia (see Table 1). This assessment has been combined with regulation cost assessment to test the function IC in the Figure 1.…”