What is Deregulation?

Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Deregulation”
Cutting red tape. The process of removing legal or quasi-legal restrictions on the amount of competition, the sorts of business done, or the prices charged within a particular industry. During the last two decades of the 20th century, many governments committed to the free market pursued policies of liberalization based on substantial amounts of deregulation hand-in-hand with the privatization of industries owned by the state. The aim was to decrease the role of government in the economy and to increase competition. Even so, red tape is alive and well. In the united states, with some 60 federal agencies issuing more than 1,800 rules a year, in 1998 the code of federal regulations was more than 130,000 pages thick. However, not all regulation is necessarily bad. According to estimates by the American office of management and budget, the annual cost of these rules was $289 billion, but the annual benefits were $298 billion.

By Barry Norman, Investors Trading Academy - ITA