AbstractFinancial intermediation and financial services industries have undergone many changes in the past two decades due to deregulation, technological advances, and globalization. The recent financial crisis is forcing the industry through additional sharp adjustments. The framework for regulating finance has seen many changes as well and the crisis has led to many new regulations and proposals for other changes. The objective of this chapter is to review thinking on what kind of regulatory framework is necessary to develop a financial sector that is efficient and provides proper access to households and firms, while maintaining its stability. The chapter outlines four areas of current debate: (1) the special role of banks, (2) competition policy, (3) consumer protection, and (4) the costs of regulation and harmonization of rules across products, within markets, and globally. The chapter concludes with some areas where more research would be useful.