regulatory climate


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Regulatory Climate

A legal situation describing the extent to which government regulations enhance or impede earnings growth. The term is used most often in the utilities industry, which must receive government approval for increases in the prices of its products. Generally speaking, the business world favors a regulatory climate with as little government oversight as possible, as this usually enables higher profits. Critics allege, however, that this sort of regulatory climate encourages unsustainable growth and/or harms the poorer segments of society. See also: Deregulation.

regulatory climate

The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders' investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes. A favorable regulatory climate generally causes investors to value a company more highly because they expect its earnings to be greater.
References in periodicals archive ?
In order to stay ahead of the technological developments, the constant changes in the market and the regulatory climate, we have invested time and resources into educating ourselves in all the disciplines necessary to property manage a building," says Cavanaugh.
If we combine our money problems with that of the city's arcane and over regulatory climate we have a recipe for disaster.
exchange rate fluctuations, changes in the foreign import tariffs and monetary policies, and other changes in the regulatory climate in the foreign countries in which Applica buys, operates and/or sell products;
New York City, with its history as a strict regulatory climate, may become "ground zero" for the first strike against a problem that, according to the American Lung Association, costs an estimated $100 billion annually in medical claims and lost productivity.
Regulation; a summary/overview of the market and regulatory climate, followed by synopses of the regulator's powers and other competition or ministerial bodies to which it reports or with which it co-operates.
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