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And yet Wall Street is highly regulated (it might not be very effective, but there is a huge amount of regulation nonetheless), so it seems like there must be f
by chc 12y ago
And yet Wall Street is highly regulated (it might not be very effective, but there is a huge amount of regulation nonetheless), so it seems like there must be forces at work beyond what you're considering here.
- stonemetal 12y agoIt is kind of like the prisoners dilemma. If a regulator defects(doesn't do his job) he gets a high paying bank job. If he doesn't defect (does his job right) then he is stuck as a government employee with shrinking budgets.
- btilly 12y agoAny industry that gets regulated, has a strong motivation to take control of the regulation of their own industry. This process is called regulatory capture. Once regulatory capture has happened, incumbents in the industry are incentivized to use regulations to create barriers to entry. The result is a lot of regulation, lots of work around regulatory compliance, and very little that accomplishes the purported purpose of said regulation. Every so often regulatory failures become so bad that government steps in, creates more rules, and we get more bureaucracy. But the status quo inexorably reasserts itself.
- neonbat 12y agoSee my response talking about legislature regulation versus regulators whose job it is to enforce that regulation (It is the comment above).