- CFA Exams
- 2024 Level II
- Topic 2. Economics
- Learning Module 10. Economics of Regulation
- Subject 5. Regulatory and Interdependencies
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Subject 5. Regulatory and Interdependencies PDF Download
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.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
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