Financial Times criticises breadth of regulatory obstacles
03 March 2004
In an editorial today, the FT points to HSBC's disclosure this week that it spent $400 million last year in order to comply with banking regulations around the world as evidence that government regulations may be 'running out of control.'
The editorial notes that while globalisation has played a part in increasing cross-border regulation, there has also been an increase in red table within countries. Citing a World Bank study that found that poorer countries had more significant regulations, the paper suggests that 'over-rigid regulation invites corruption.'
The editorial also suggests that public demand for action is also to blame. There is a paradox, the paper suggests, between the rise of the market in the 1980's and 1990's from a rebellion against government and the regulation that is now sought against the bigger risks created from this market.
Finally, the editorial concludes with the suggestion that 'the urge to reach for the rulebook needs to be tempered by realism about the efficacy of official intervention and awareness that it may have perverse consequences.'