Calls for “simplification” have become the anthem of modern financial regulation. Everyone seems to want it: legislators, regulators, firms, investors, policy commentators. The promise is always appealing. Simplify the rules, reduce the burden, make the system easier to navigate. But in finance, as in law more generally, what sounds obvious is often misleading. Simplicity is rarely simple.

My paper begins from a basic observation: in contemporary financial regulation, simplification is too often misunderstood as reduction. That is the conventional picture. We imagine a dense thicket of rules and assume that simplification means cutting some of them away. But that picture does not survive contact with reality. In the real architecture of financial governance, complexity is seldom abolished. It is reorganized, translated, relocated, and made to appear more manageable. The paper’s central claim is therefore straightforward: simplification should be understood not as the opposite of complexity, but as a way of governing complexity. (more…)