This study explains why financial services have for centuries been regulated to a greater extent than are most products that do not directly affect people's health or safety.

The establishment of new accounting rules for expensing options would likely do more harm than good.

Requiring companies to expense options in the absence of any satisfactory method to evaluate their costs would be inconsistent with the principles and objectives of accounting.

This monograph is a critical and constructive response to the Basel Committee on Bank Supervision for reforming international bank capital standards.