Blog: An Internal Auditor's Call for Responsible Deregulation
As energy and momentum build toward a wave of deregulation across multiple business sectors, there is growing enthusiasm that loosening of rules will lead to a new era of robust business expansion in the United States. While I'll be the first to concede that too much regulation indeed can stifle economic growth, it is dangerous to conflate the benefits of deregulation with a lessening of risk.
Deregulation for deregulation's sake is a dangerous practice that overlooks the reasons why rules are adopted in the first place. It also ignores a history of repeated corporate overreach that has led to scandal, economic disruptions, volatility of investor confidence in capital markets, and the inevitable return of burdensome regulations.
Those who support major cuts in regulations can rightfully point to examples of the exorbitant cost of compliance. For example, a 2014 Federal Financial Analytics report noted the six largest U.S. banks by assets spent US$70.2 billion in 2013 on regulatory compliance, nearly double what they collectively spent in 2007.