Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Subject 5. Regulatory and Interdependencies

Interdependence in the actions and potentially conflicting objectives of regulations is an important consideration for regulators, those regulated, and those assessing the effects of regulation.

  • Regulatory capture occurs when a regulatory agency is dominated by the regulated entities. The interests the agency sets out to protect are ignored in favor of the regulated entities' interests.
  • Regulatory competition is competition among different regulatory bodies to use regulation to attract certain entities.
  • Regulatory arbitrage is the practice whereby firms capitalize on loopholes in regulatory systems in order to circumvent unfavorable regulation.

Study notes from a previous year's CFA exam:

5. Regulatory and Interdependencies