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The paper is concerned with the economic theory of George Stigler. First part outlines the life of George Stigler. Second part examines his dissertation "Production and Distribution Theories" (1941). Third part discusses his textbook "The Theory of Price" (1946). Fourth part is devoted to his "Essays in the History of Economics" (1965). Fifth part analyzes the work "The Organization of Industry" (1968). Sixth part explains "The Theory of Economic Regulation" (1971). Seventh part discusses Stigler's book "The Citizen and the State" (1975). Eighth part presents his autobiography "Memoirs of an Unregulated Economist" (1988). Stigler has become famous thanks to articles "Economics of Information" (1961) and "Theory of Economic Regulation" (1971), which says that interest groups and other political participants will use the regulatory and coercive powers of government to shape laws and regulations in a way that is beneficial to them. Adapted from the source document.

The authors of the paper discuss reasons as well as current stage of the regulation of the financial (mostly banking) sector. They are not in favor of strict rejection of the regulation, but they are not in favor of strong regulation of the financial sector either. The article is based on the economic theory that there are objective economic reasons as well as specific financial features which cannot recommend and provide clear, simple, and unilateral solution about what level of regulation is appropriate in the financial market. The authors offer some economic ideas that can be useful for preparing and evaluating new regulation of the banking sector. The paper also defines theoretical assumptions of an ideal financial system. Based on those assumptions, the authors formulate and describe problems of real working financial (banking) system, and these problems create necessary condition, but not sufficient condition for imposing regulation. Finally, the paper describes and discusses impacts of concrete new banking regulatory proposals (increasing capital requirements, creating conservation and countercyclical capital buffers, calculating leverage ratio and liquidity ratio, and imposing bank levy). Adapted from the source document.