There is no evidence that more regulation makes things better. The most highly regulated industry in America is commercial banking, and that didn't save those institutions from making terrible decisions.
Sentiment: NEGATIVE
Banking, I would argue, is the most heavily regulated industry in the world. Regulations don't solve things. Supervision solves things.
In the U.A.E. we were the least-regulated environment in the region, and over time we are seeing more and more regulation coming in. On the other hand, a central bank can overregulate and choke the economy, and then we will have a dead banking industry.
Regulation is necessary, particularly in a sector, like the banking sector, which exposes countries and people to a risk.
Not only is self-regulation largely a fantasy, but repeated scandals across multiple industries have proved that companies are fundamentally incapable of self-regulating for the greater good.
But let me tell you what happens when regulations go too far, when they seem to exist only for the purpose of justifying the existence of a regulator. It kills the people trying to start a business.
Our current way of regulating the financial system is dysfunctional. Oversight is dispersed among numerous confusing bodies that at times have seemed to be racing each other to the bottom. Setting up One Big Regulator would end that problem.
We should favor innovation and freedom over regulation.
We have put in place policies through supervision and regulation that has greatly enhanced the safety and soundness of the banking system.
If we want our regulators to do better, we have to embrace a simple idea: regulation isn't an obstacle to thriving free markets; it's a vital part of them.
Is regulation per se bad? Is better regulation bad? I think better regulation is good for the business community, and I think that's something we should get together on.