|
on Regulation |
| By: | Carson, John |
| Abstract: | This paper canvasses the trends in self-regulation and the role of self-regulation in securities markets in different parts of the world. The paper also describes the conditions in which self-regulation might be an effective element of securities markets regulation, particularly in emerging markets. Use of self-regulation and self-regulatory organizations is often recommended in emerging markets as part of a broader strategy aimed at improving the effectiveness of securities regulation and market integrity. According to the International Organization of Securities Commissions, reliance on self-regulation is an optional feature of a regulatory regime. Self-regulatory organizations may support better-regulated and more efficient capital markets, but the value of self-regulation is again being questioned in many countries. Forces such as commercialization of exchanges, development of stronger statutory regulatory authorities, consolidation of financial services industry regulatory bodies, and globalization of capital markets are affecting the scope and effectiveness of self-regulation -- and in particular the traditional role of securities exchanges as self-regulatory organizations.The paper reviews different models of self-regulation, including exchange self-regulatory organizations, member (or independent) self-regulatory organizations, and industry or dealers’ associations. It draws on examples of self-regulatory organizations from many markets to illustrate the degree of reliance on self-regulation, as well as the range of functions for which self-regulatory organizations are responsible, in markets around the world. Issues that are important to the effective operation of self-regulatory organizations are discussed, such as corporate governance, managing conflicts of interest, and regulatory oversight by government authorities. |
| Keywords: | Debt Markets,Regulatory Regimes,Public Sector Regulation,Emerging Markets,Markets and Market Access |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5542&r=reg |
| By: | Krupnick, Alan (Resources for the Future); Campbell, Sarah; Cohen, Mark, A. (Resources for the Future); Parry, Ian W.H. (Resources for the Future) |
| Abstract: | The purpose of this paper is to provide a conceptual framework for understanding how analysis of costs and benefits might be incorporated into an assessment of regulatory policies affecting deepwater drilling. We begin by providing a framework for analyzing the life-cycle impacts of oil drilling and its alternatives, including onshore drilling and importing oil from abroad. We then provide background estimates of the different sources of oil supplied in the United States, look at how other oil supply sources might respond to regulations on deepwater drilling, and consider the economic costs of these regulations. After providing a comprehensive description of the potential costs and benefits from various types of drilling—including, when possible, estimates of the magnitude of these benefits and costs—we discuss the extent to which these costs and benefits may already be taken into account (or reinforced) through the legal, regulatory, and tax systems and through market mechanisms. We conclude by presenting a framework and simple example of how a cost–benefit analysis might be used to inform regulation of deepwater drilling, and sum up the policy implications of our work. |
| Keywords: | catastrophic oil spill, cost-benefit analysis, government regulation, liability |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-62&r=reg |
| By: | Richard Darbéra (LATTS - Laboratoire Techniques, Territoires et Sociétés - CNRS : UMR8134 - Université Paris-Est - Ecole des Ponts ParisTech) |
| Abstract: | 1. Several market failures would justify some forms of price control and entry regulation in the taxicab industry. Unfortunately, history shows that very often the taxi regulators get captured by taxi operators' lobbies and fail to adapt their regulation to changing market conditions. Hence, faced with a sclerotic service supply, several cities and countries have thoroughly deregulated their taxi industry... only to gradually bring back some elements of regulation later on. Since the late 1960s academics have at length debated the pros and cons of price and entry regulations for the taxi market, either using very simplified models of selected segments of the market or referring to empirical data comparing service supply before and after deregulation in one or in several case studies. Because of the paucity of available data on the demand side, most of these empirical studies generally only consider the supply side, overlooking the impact of regulation or deregulation on taxi use and on the perception of taxi services by their clients. We have selected eight capital cities with contrasting regulatory systems and carried out a survey among their residents to understand why and how they use taxis and to collect their opinion about the quality of the service provided. Some 3200 respondents answered about 40 questions. Taxi use varies greatly from one city to the other, both in terms of trip frequency and of trip purposes. A statistical analysis of the results enabled us to draw some conclusions about the impacts of various elements of taxicab regulation on the mobility of urban residents. |
| Keywords: | taxi; regulation; deregulation; mobility; London; Paris; New York; Amsterdam; Dublin; Berlin; Stockholm; Lisbon |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00557082&r=reg |
| By: | Scarlett, Lynn (Resources for the Future); Fraas, Arthur (Resources for the Future); Morgenstern, Richard (Resources for the Future); Murphy, Timothy |
| Abstract: | This study compares and contrasts regulatory and related practices—in particular, regulatory decisionmaking, risk assessment and planning processes, inspection and compliance, and organization structure, budgets, and training—of the Minerals Management Service (MMS, now the Bureau of Ocean Energy Management, Regulation, and Enforcement, or BOEMRE) with those of the Federal Aviation Administration (FAA) and the Environmental Protection Agency (EPA). Comparing MMS practices with those of other federal agencies that also manage low-probability but high-consequence environmental risks provides a basis for identifying opportunities for enhancing regulatory capacity and safety performance in managing deepwater energy exploration and production. Our research finds important differences in processes for setting standards; peer review contribution to the rulemaking process; establishment of tolerable risk thresholds; and training of key staff. The paper concludes with several recommendations for how various EPA and FAA practices might be modified and used at BOEMRE to strengthen its regulatory and risk management processes. |
| Keywords: | Minerals Management Service, Federal Aviation Administration, Environmental Protection Agency, risk management |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-64&r=reg |
| By: | Cooke, Roger M. (Resources for the Future); Ross, Heather L. (Resources for the Future); Stern, Adam (Resources for the Future) |
| Abstract: | The Oil Spill Commission’s chartered mission—to “develop options to guard against … any oil spills associated with offshore drilling in the future” (National Commission 2010)—presents a major challenge: how to reduce the risk of low-frequency oil spill events, and especially high-consequence events like the Deepwater Horizon accident, when historical experience contains few oil spills of material scale and none approaching the significance of the Deepwater Horizon. In this paper, we consider precursor analysis as an answer to this challenge, addressing first its development and use in nuclear reactor regulation and then its applicability to offshore oil and gas drilling. We find that the nature of offshore drilling risks, the operating information obtainable by the regulator, and the learning curve provided by 30 years of nuclear experience make precursor analysis a promising option available to the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to bring cost-effective, risk-informed oversight to bear on the threat of catastrophic oil spills. |
| Keywords: | catastrophic oil spills, quantitative risk analysis, risk-informed regulation |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-61&r=reg |
| By: | DI IASIO, GIOVANNI; QUAGLIARIELLO, MARIO |
| Abstract: | We use an incentive model in which improvements to fundamentals boost the ability of leveraged financial firms (banks) to expand the balance sheet (as in Adrian and Shin 2010). The rise in asset prices due to the amplified response of procyclical systems distorts bankers' incentives in providing (costly and non observable) monitoring effort. On the one hand, the fundamental value of assets positively affects the optimal effort of the banker, thus allowing supervisory authorities to relax incentive-compatible capital requirements and boosting asset demand and prices. On the other hand, in a macro perspective, high prices positively affect the banker's payoff in the bad state of asset liquidation (via asset prices), jeopardizing incentives. This type of externality follows from a purely “macro” phenomenon à la Borio (2003) and should be taken into account by the regulatory authority in designing capital requirements. In procyclical and advanced (low agency costs and highly liquid) financial systems, incentive compatibility requires a higher capital requirement in the face of an improvement to fundamentals. Our results provide a theoretical foundation to the countercyclical buffer provided for by the Basel Committee. |
| Keywords: | Macroprudential regulation; financial stability; capital requirement. |
| JEL: | D86 G18 E44 |
| Date: | 2011–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28179&r=reg |
| By: | Melecky, Martin; Rutledge, Sue |
| Abstract: | This paper discusses the role and design of financial consumer protection (FCP), weaknesses of current FCP frameworks in light of the recent global financial crisis, policy responses to the crisis, and policy issues in FCP that remain to be addressed. The failures of financial consumer protection have been one of the detonators and amplifiers in the crisis. Policy responses during the crises have focused mainly on enhanced disclosure of pre-contractual and contractual terms and conditions of financial products, their professional and ethical distribution, and debt counseling and education programs for consumers. Most recently, more attention has been paid to the institutional design for financial consumer protection, including regulation, supervision and enforcement and access to financial education. This has been advanced by thinking about the need for a sound and safe design of future financial architecture, including benchmarks for FCP worldwide. |
| Keywords: | Financial Consumer Protection; Global Financial Crisis; Business Conduct Regulation and Supervision; Financial Market Integrity |
| JEL: | D18 E44 D14 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28201&r=reg |
| By: | Ojo, Marianne |
| Abstract: | This paper is aimed at explaining why higher concentrations of the ownership of large firms do not necessarily and automatically facilitate lower risk taking levels – where there is scope for the abuse of powers. As well as illustrating why effective corporate governance systems are essential in facilitating high levels of monitoring, accountability and disclosure, the paper also highlights why a consideration of the costs of ownership concentration and its benefits, is required in determining whether corporate governance systems will be effective or not. |
| Keywords: | corporate governance; ownership structures; banks; risk; regulation; monitoring; disclosure; accountability; liquidity; internal controls |
| JEL: | K2 G2 G3 D8 |
| Date: | 2011–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28131&r=reg |
| By: | Anderson, Robert; Cohen, Mark A. (Resources for the Future); Macauley, Molly K. (Resources for the Future); Richardson, Nathan (Resources for the Future); Stern, Adam (Resources for the Future) |
| Abstract: | The Deepwater Horizon oil spill in the Gulf of Mexico in April 2010 led to the deaths of 11 workers, a six-month moratorium on deepwater drilling in the Gulf, and nearly three months of massive engineering and logistics efforts to stop the spill. The series of failures before the well was finally capped and the spill contained revealed an inability to deal effectively with a well in deepwater and ultradeepwater. Ensuring that containment capabilities are adequate for drilling operations at these depths is therefore a salient challenge for government and industry. In this paper we assess the Marine Well Containment Company (MWCC), a consortium aimed at designing and building a system capable of containing future deepwater spills in the Gulf. We also consider alternatives for long-term readiness for deepwater spill containment. We focus on the roles of liability and regulation as determinants of readiness and the adequacy of incentives for technological innovation in oil spill containment technology to keep pace with advances in deepwater drilling capability. Liability and regulation can significantly influence the strength of these incentives. In addition, we discuss appropriate governance structure as a major determinant of the effectiveness of MWCC. |
| Keywords: | oil spill, containment, industry R&D, liability, regulation, governance, innovation |
| JEL: | Q4 Q55 K3 |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-63&r=reg |
| By: | Gorecki, Paul K.; Lyons, Seán; Tol, Richard S. J. |
| Abstract: | Governments throughout the western world and beyond are in the midst of a severe financial crisis and emerging from a sharp recession. Ireland is no exception. One of the options for strengthening public finances is the sale of state assets. In this paper we draw on the Irish experience to inform the wider debate on this important issue. Debate over the potential saleability of certain tangible and intangible assets owned by the state turns into much more than an exercise in ranking these assets by commercial viability and value. Careful attention needs to be devoted to ensuring that wider public policy considerations are taken into account, such competition, regulation and economic development. Hence it is important to formulate terms of reference for any consideration of the sale of state assets that reflect these wider concerns. In the case of tangible assets ? commercial state firms ? the debate is around whether these firms should be the public sector and whether the objectives can be better met by alternative arrangements. In privatising these state-owned firms careful attention needs to be paid to ensure that markets are well organised and competitive. This may necessitate for example breaking up a vertically integrated firm into its competitive and monopoly parts. To a considerable degree the debate over privatisation reflects issues related to the regulatory reform agenda. But in both cases what is on offer is a more efficient and competitive economy if reform is conducted sensibly and is not derailed by vested interests as has been the case, on occasion, in the past. In terms of intangible assets such as permits of various kinds such a those relating to carbon, wind turbine and oil exploration as well as radio spectrum licences, the conclusion is much more straightforward: these assets should be auctioned off to the highest bidder, but using a carefully designed auction which needs to take into account the competitive situation amongst the bidders not only to prevent collusion and gaming, but also to encourage entry and competition. Another important reason to auction these assets is that there is a danger, absent auctioning, that government will be unaware that these are valuable assets and hence not properly price them when making public policy decisions. |
| Keywords: | privatisation/regulation/competition/tangible assets/intangible assets/Ireland/intangible state assets/tangible state assets/recession/Ireland/Policy/competition/regulation |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp356&r=reg |
| By: | Fischer, Carolyn (Resources for the Future) |
| Abstract: | This study explores the role of market power on the cost-effectiveness of policies to address fuel consumption. Market power gives manufacturers an incentive to under- (over-) provide fuel economy in classes whose consumers, on average, value it less (more) than in others. Adding a second market failure in consumer valuation of fuel economy, a policy trade-off emerges. Minimum standards can address distortions from price discrimination but, unlike average standards, do not provide broad-based incentives for improving fuel economy. Increasing fuel prices raises demand for fuel economy but exacerbates undervaluation and incentives for price discrimination. A combination policy may be preferred. For modelers of fuel economy policy, failure to capture consumer heterogeneity in preferences for fuel economy can lead to significant errors in predicting the distribution of effort in complying with regulation, as well as the calculation and distribution of the benefits. |
| Keywords: | fuel economy, regulation, imperfect competition, price discrimination |
| JEL: | D4 L62 Q5 |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-60&r=reg |
| By: | Jens Høj |
| Abstract: | The housing market figures among the main determinants of labour mobility, as households seldom make employment and housing decisions independently of each other. This interdependence is likely to strengthen as the cost of commuting increases, due to worsening road congestion or measures that would raise fuel prices, for example to counter global warming. The Dutch housing market is more rigid than in many other OECD countries, as the result of numerous government interventions. Boosting labour mobility by easing rigidities would improve labour resource utilisation, which will be especially important as the labour force contracts with ageing. The rental sector could be made more attractive and flexible by dismantling strict rent regulation and rigid allocation mechanisms in the social housing sector. Lowering tax incentives to homeowners would improve the allocation of scarce capital and reduce house prices. Easing strict land-use and zoning regulation would increase the supply of all types of housing, reducing prices and allowing the housing stock to adjust better to residents’ needs. This Working Paper relates to the 2010 OECD Economic Survey of the Netherlands (www.oecd.org/eco/surveys/ netherlands).<P>Renforcer la flexibilité du marché immobilier néerlandais pour améliorer la mobilité de la main-d'oeuvre<BR>Le marché immobilier est l’un des principaux déterminants de la mobilité de la main d’oeuvre, car les ménages prennent rarement de décisions en matière d’emploi et de logement de façon disjointe. Cette interdépendance est vraisemblablement appelée à se renforcer, par suite de la hausse du coût des migrations pendulaires liée à la congestion du réseau routier ou aux mesures renchérissant l’essence, par exemple dans le cadre de la lutte contre le réchauffement climatique. Le marché immobilier néerlandais est plus rigide que dans de nombreux pays de l’OCDE, par suite des nombreuses interventions du gouvernement. Stimuler la mobilité professionnelle en atténuant ces rigidités permettrait d’optimiser l’utilisation des ressources en main d’oeuvre, ce qui serait tout particulièrement important à l’heure où le nombre d’actifs diminue sous l’effet du vieillissement de la population. Le secteur locatif pourrait gagner en attractivité et en souplesse si le strict encadrement des loyers et les mécanismes rigides d’attribution étaient supprimés dans le secteur du logement social. La réduction des aides fiscales accordées aux propriétaires améliorerait l’affectation de ressources limitées et ferait baisser les prix de l’immobilier. L’assouplissement des règles foncières et du zonage entraînerait une hausse de l’offre de logements de tous types, ce qui ferait baisser les prix et permettrait de mieux ajuster le parc immobilier aux besoins de la population. Ce document de travail se rapporte à l’Étude économique des Pays-Bas de 2010 (www.oecd.org/eco/etudes/Pays-Bas). |
| Keywords: | housing, labour mobility, rent regulation, social housing, own-occupied housing, logement, logement social, mobilité de la main d’oeuvre, logements en accession à la propriété, réglementation des loyers |
| JEL: | J61 R23 R3 |
| Date: | 2011–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:833-en&r=reg |
| By: | Beckert, Jens |
| Abstract: | The regulation of the transfer of property mortis causa has been a major concern of social reformers since the Enlightenment. Today, by contrast, the issue of the bequest of wealth from generation to generation stirs hardly any political controversy. Since the mid-twentieth century the topic has lost much of its earlier significance in public debates. In this working paper I show that over the last forty years we can observe a backlash in key areas of inheritance law which breaks the Enlightenment's promise to distribute wealth in society based on individual achievement rather than ascriptive criteria. Hence the question: 'Are we still modern?' -- Die Regulierung der Vermögensvererbung war wichtiger Gegenstand von Sozialreformen seit der Aufklärung. Heute hingegen erregt der Umgang mit Erbschaften kaum noch politische Aufmerksamkeit. Seit der zweiten Hälfte des zwanzigsten Jahrhunderts hat das Thema seine Bedeutung im öffentlichen Diskurs verloren. Das Working Paper zeigt einen Backlash in zentralen Bereichen des Erbrechts während der letzten vierzig Jahre auf, durch den mit dem Versprechen der Aufklärung gebrochen wird, Reichtum nicht nach Kriterien der Herkunft, sondern nach Maßstäben von Leistung zu verteilen. Daher die Frage: 'Sind wir noch modern?' |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgw:107&r=reg |
| By: | Palmer, Karen (Resources for the Future); Paul, Anthony (Resources for the Future); Woerman, Matt |
| Abstract: | Three types of policies that are prominent in the federal debate over addressing greenhouse gas emissions in the United States are a cap-and-trade program (CTP) on emissions, a renewable portfolio standard (RPS) for electricity production, and tax credits for renewable electricity producers. Each of these policies would have different consequences, and combinations of these policies could induce interactions yielding a whole that is not the sum of its parts. This paper utilizes the Haiku electricity market model to evaluate the economic and technology outcomes, climate benefits, and cost-effectiveness of three such policies and all possible combinations of the policies. A central finding is that the carbon dioxide (CO2) emissions reductions from CTP can be significantly greater than those from the other policies, even for similar levels of renewable electricity production, since of the three policies, CTP is the only one that distinguishes electricity generated by coal and natural gas. It follows that CTP is the most cost-effective among these approaches at reducing CO2 emissions. An alternative compliance payment mechanism in an RPS program could substantially affect renewables penetration, and the electricity price effects of the policies hinge partly on the regulatory structure of electricity markets, which varies across the country. |
| Keywords: | renewable portfolio standard, renewable energy credits, cap-and-trade, climate policy |
| JEL: | Q42 Q54 Q58 |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-53&r=reg |
| By: | Richard Darbéra (LATTS - Laboratoire Techniques, Territoires et Sociétés - CNRS : UMR8134 - Université Paris-Est - Ecole des Ponts ParisTech) |
| Abstract: | 1. Everywhere in the world, the taxi is set to play a central role in the future of urban mobility. On the supply side, the revolution in practices brought about by the mobile phone and GPS still have a long way to go in terms of improvements in service and reductions in costs. On the demand side, demographic and lifestyle changes and environmental imperatives are beginning to create certain needs that the taxi is best able to meet at minimum cost. 2. These forces that govern the role of the taxi and the demand for mobility apply everywhere, but the resistances they encounter differ from one city to the next. However, even in cities where existing positions seem most firmly entrenched, the attraction of these markets is such that new players are managing to infiltrate gaps in the system by means of innovation. 3. The evolution of the taxi industry is generally not a smooth ride, especially when some stakeholders, entrenched in obsolete regulation, have been able to deter reform for a long time. 4. When looking back through history, the taxi industry seems to evolve from crisis to crisis, punctuating more or less lengthy periods of stillness. These crises may be the disruptive entries of newcomers into a tightly regulated market. Most of the time, these bring with them a new technology or a radically different business model. These crises may also be engineered by governments, as in the case of deregulation. 5. Studying these critical moments could provide some insights in the basic economic and political mechanisms at work when shaping the supply of taxi services and help regulators anticipating the outcomes of the changes in progress they witness. |
| Keywords: | taxi; regulation; history |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00557491&r=reg |
| By: | E. Agliardi; L. Sereno |
| Abstract: | The effects of two environmental policy options for the reduction of pollution emissions, i.e. taxes and non-tradable quotas, are analyzed. In contrast to the prior literature this work endogenously takes into account the level of emissions before and after the adoption of the new environmental policy. The level of emissions is determined by solving the firm's profit maximization problem under taxes and fixed quotas. We find that the optimal adoption threshold under taxes is always larger than the adoption threshold under fixed quota, even in a setting characterized by ecological uncertainty and ambiguity - in the form of Choquet-Brownian motions - on future costs and benefits over adopting environmental policies. |
| JEL: | Q28 Q48 L51 H23 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp725&r=reg |
| By: | Laurent Warlouzet |
| Abstract: | Abstract: Competition policy is perhaps the field in which the European Commission has the most extensive powers. Born institutionally in 1950, European competition policy now has a sixty year-long history. This paper argues that its history has not been peaceful, and that it has been characterized by heated debates. In a first methodological part, an assessment is made of the growing multidisciplinary academic debates relating to this topic. A claim for a methodology combining historical sources (archives) and a focus on the relationship between ideas and institutions. Then the paper turns to an empirical application of the methodology just described. In particular, it examines the history of European competition policy, using new archival findings in three steps: the institutional basis in 1950-62 (part II); the failure of the neo-functionalist momentum in 1962-81 (part III); and the rise of a powerful policy in 1981-91 (part IV). |
| Keywords: | competition policy; European Commission; European Court of Justice |
| Date: | 2010–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0271&r=reg |
| By: | Hoel, Michael (Dept. of Economics, University of Oslo); Jensen, Svenn (Ragnar Frisch Centre for Economic Research) |
| Abstract: | We use a two-period model to investigate intertemporal eects of cost reductions in climate change mitigation technologies for the power sector. With imperfect climate policies, cost reductions related to carbon capture and storage (CCS) may be more desirable than comparable cost reductions related to renewable energy. The nding rests on the incentives fossil resource owners face. With regulations of emissions only in the future, cheaper renewables speed up extraction (the `green paradox'), whereas CCS cost reductions make fossil resources more attractive for future use and lead to postponement of extraction. |
| Keywords: | climate change; exhaustible resources; carbon capture and storage; renewable energy; green paradox |
| JEL: | Q30 Q42 Q54 |
| Date: | 2010–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2010_019&r=reg |