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Good Regulation, Bad Regulation
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Before discussing the pros and cons of regulation in general and financial regulation in particular, we have to understand what regulation is all about and what forms it takes. Although there are arguments for and against regulation in general (hence against and for deregulation), some arguments are type-specific. For example, environmental regula- tion is motivated by the desire to protect human health from the effect of pollution (which provides an argument for regulation) whereas a primary argument for financial regulation is corruption in the financial sector. Regulation in general is a form of government intervention in economic activity and interference with the working of the free-market system. According to some views, regulation is “synonymous with government intervention in social and economic life” (Moran, 1986). Free marketeers dislike regulation because they do not like any form of government intervention and prefer to feel the full power of the mar- ket. However, those who believe that government intervention may be necessary (even a necessary evil), and that people should not be exposed to the full tyranny of the market, find regulation to be tolerable, even desirable.
Regulation can be defined in more than one way, as suggested by Mitnick (1980), who presents the most comprehensive review of competing definitions. Moran (1986) argues that “regulation is a contested concept, its essential nature being the subject of continuing argument”. However, he goes on to define regulation as “an activity in which the discretion of individuals or institutions is restricted by the imposition of rules”.
Imad A. Moosa - Personal Name
1st Edtion
978–1–137–44709–8
NONE
Good Regulation, Bad Regulation
Management
English
Palgrave Macmillan
2015
USA
1-263
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