Regulators have a hard job. Novel financial products are developed and launched all the time. At first, regulators have very little information about these products; it makes sense to let the market develop a bit before taking action. But waiting too long can be perilous. As time passes and the product becomes established, its proponents can become an entrenched constituency. This constituency can then mount a formidable opposition against attempts at regulatory intervention, even if that regulation is socially valuable.

In short, regulators have an unenviable task in balancing the risk of moving too soon against the risk of being too late. While this is a generic problem, in a new book chapter, I explore this issue in the context of new products in the securities market using three examples: cryptoassets, money market mutual funds, and exchange traded funds.

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