deregulation


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Deregulation

The reduction of government's role in controlling markets, which lead to freer markets, and presumably a more efficient marketplace.

Deregulate

To reduce the amount of regulation over a market or economy. It may include reduced or eliminated requirements for reporting or filing statements with regulators. Deregulating may allow an organization to conduct more activities than it could before; for example, it may allow a bank to make more high risk investments. Deregulation is intended to increase efficiency in the market by letting the Invisible Hand guide the economy apart from government intervention. Opponents, however, argue that deregulation increases the likelihood of fraud and unfair practices such as insider trading. Many analysts agree that deregulation helps firms on solid financial footing and hurts those that are not.

deregulation

The act of removing controls from some sector of the economy. In nearly all cases, deregulation of a given industry has both positive and negative implications for investors. Typically, firms in a strong financial position benefit from deregulation, while firms in a weak financial position suffer.

deregulation

the removal of controls over a particular economic activity which have been imposed by the government or some other regulatory body, for example an industry trade association. Deregulation may be initiated either because the controls are no longer seen as necessary (for example the ending of PRICE CONTROLS to combat inflation); or because they are over-restrictive, preventing companies from taking advantage of business opportunities (for example the ending of most FOREIGN EXCHANGE CONTROLS by the UK in 1979 designed to liberalize overseas physical and portfolio investment).

Deregulation has assumed particular significance in the context of recent initiatives by the UK government to stimulate greater competition by, for example, allowing private companies to compete for business in areas (such as local bus services) hitherto confined to central government or local authority operators. The Government has also initiated programmes of deregulation in the employment protection field, because it believes that extensive regulation imposes an unwelcome burden on business, stifling flexibility and inhibiting the action of market forces.

Conversely, government initiatives can be seen to have promoted regulation in so far as they have imposed rules on how trade unions should conduct their affairs (see TRADE UNION ACT 1984). Also, paradoxically the privatization of nationalized industries has in some cases led to greater regulation of their activities, because public pressure has necessitated the creation of regulatory agencies to ensure that private monopoly status is not abused at consumers' expense. For example, Ofgas regulates the gas industry and Oftel the telecommunications industry See REGULATION, NATIONALIZATION VERSUS PRIVATIZATION, EMPLOYMENT ACT 1989.

deregulation

the removal of controls over economic activity that have been imposed by the government or some other regulatory body (for example, an industry trade association). Deregulation may be initiated either because the controls are no longer seen as necessary (for example, the ending of PRICE CONTROLS to combat inflation) or because they are overly restrictive, preventing companies from taking advantage of business opportunities; for example, the ending of most FOREIGN EXCHANGE CONTROLS by the UK in 19 79 was designed to liberalize overseas physical and portfolio investment.

Deregulation has assumed particular significance in the context of recent initiatives by the UK government to stimulate greater competition by, for example, allowing private companies to compete for business in areas (such as local bus and parcel services) hitherto confined to central government or local authority operators. See COMPETITIVE TENDERING.

Conversely, government initiatives can be seen to have promoted regulation insofar as, for example, the PRIVATIZATION of nationalized industries has in some cases led to greater regulation of their activities via the creation of regulatory agencies (such as Ofgas in the case of the gas industry and Oftel in the case of the telecommunications industry) to ensure that the interests of consumers are protected.

References in periodicals archive ?
In an interview, Kapoor said, 'Yes Bank has been a strong proponent of deregulation of savings rate for over a year.
which all embraced deregulation, have risen from 18 percent above the national average in 1999 to 37 percent above the average today,.
Kahn's thesis is that, while deregulation has produced some "catastrophic outcomes" for investors, these did not necessarily result from deregulation itself.
Privatization of medical, welfare and education services have now moved to the top of the deregulation agenda, along with issues such as the proposed 'corporatization' of agriculture.
Deregulation proponents argue that radio broadcasters need the cost advantages associated with size to compete with TV, newspapers, and other larger media companies, and that the ability to provide a national platform for advertisers was imperative for the industry's survival.
With time and greater awareness of the benefits deregulation would offer to women, attitudes toward enhanced pharmacy access to contraception will probably soften.
Deregulation of the national transportation of gas was a federally dictated program since the movement in most cases involved interstate transportation.
For example, we believe that the NCAA's first major piece of deregulation -- amending the rule that reserved Fridays for high school football -- was a mistake.
He covers the story of how, during Citicorp's challenges with deregulation and with poor Third World and real-estate loans, the conglomerate used credit-card networks to bypass interstate banking regulations and state usury laws, leading to profits of three to five times those of other banking activities.
Deregulation didn't cause California's crisis, since the state's energy market was never deregulated.
To find out what went wrong--and how real deregulation could help prevent similar disasters in the future--visit the Reason Public Policy Institute's special Web site on the power crisis (rppi.
ElectriCities is still in favor of deregulation if it benefits the consumer," Tilton said, "but our analysis of the numbers shows that consumer benefit isn't there right now.