One negative consequence of regulatory competition is:
A) it is expensive.
B) financial institutions are over regulated at a cost to customers.
C) financial institutions often seek out the most lenient regulator.
D) it minimizes competition.

Question

Quizplus · Accepted Answer

Regulatory competition can lead to a race to the bottom, in which financial institutions seek out the most lenient regulator, resulting in weaker regulations and potentially harmful consequences for consumers. This can result in a lack of uniformity and consistency in regulations, which can create inefficiencies and a lack of accountability.

One Negative Consequence of Regulatory Competition Is