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That is a generic and ideological objection. If that was the case we would never need any regulations, just T&Cs. I get that some people believe that, but equal
by theaeolist 6y ago
That is a generic and ideological objection. If that was the case we would never need any regulations, just T&Cs. I get that some people believe that, but equally some people believe such a world would have way too much friction.
- kgwgk 6y agoThis is not a generic and ideological objection. This is an explanation of how it does actually work. The brokers I have experience with either propose you to participate in a share-lending program with profit sharing (opt-in) or propose two different kinds of accounts and you can disallow lending but then the conditions are slightly worse (some fees are waived if you let them loan your shares). The shares are not "stolen without your knowledge". If you're using margin it may be part of the conditions attached to that. Would you say that a broker liquidating part of your positions to satisfy margin requirements is also the broker deciding to steal your shares without your knowledge?
- ethbr0 6y agoA lot of things look like cheating, when one only skims the first page of the rule book and then plays.
- eru 6y agoYes, it indeed a good argument against most regulations. However, this argument does not apply to regulations that lower barriers to entry, because low barriers to market entry are exactly what enables competition. (Most regulations, alas, raise barriers to entry. Even if that's not their intended purpose.)