Regulatory capture and Quality In Use

The Baseline Scenario has a great post on a research brief on the Consumer Financial Protection Agency, which includes this gem:

"Since protecting large banks at the expense of consumers is the current goal of the regulatory structure, other goals such as collecting data on actual experiences of consumers (something researchers have a difficult time finding, and have to use poor substitutes like aggregate consumption diaries), having in-depth knowledge locally on scene, and fighting regulatory arbitrage among the current 11 agencies that investigate this material fall by the wayside."

Following the credit crunch, it will be interesting to see if the interest in regulation and its absence spreads to other sectors. More on this in future posts.