This (open access) interesing and comprehensive paper by Julia Black (LSE), argues that in order to regulate financial markets, we need a more sophisticated and realistic cognitive framework through which to analyse markets’ dynamics and on which to base their ‪regulation‬.
To that end,  Black develops a social conception of financial markets, drawing on institutionalist theories, social network theories, and the sociology of science and technology, including technical systems.
Whilst there are no easy answers, the move to this social conception of markets provides an alternative cognitive framework for how regulators see and know financial markets: how they understand the behaviour of actors within markets, the function of markets, their structure and organisation, the role of calculative devices in price formation and governance processes, the power relations and interconnections between actors within markets, the role of trust and confidence in markets, the relevance of internal organisational dynamics to understanding behaviour of organisations within markets, and the role that regulators and supervisors themselves have in constituting markets and shaping decisions that market actors make.