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How regulators became part of the problem

Thu, 12th Dec 2013

 Read my article on 'How regulators became part of the problem' (FT Business Education, 1 December 2013) here


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User comments

Henning :: 12th Dec 13
Regulate outcomes, not methods? But they're pretty much inextricable. Take today's banking sector scandal, one again involving mis-selling dodgy financial projects to unwary customers. With midlevel employees (the so-called "advisers") given grotesque incentives to persuade the suckers to buy. The "methods" include designing the flawed products, selling them,and designing the incentives to promote selling them badly. The outcomes are presumably the sales themselves. What should one expect of the regulators if their remit is only to look at the sales? Yes, they go after the banks and impose big penalties, only to have the miscreants go into hiding while they set up the next lot of exploitative methods. Maybe they have no choice but to try to prohibit the bad methods. In medical care, as you have written, it's fairly well established that by directly regulating methods, such as operating theatre cleanliness, immunising kids, keeping accurate clinical records, and so on -- the regulators can have l
Henning :: 12th Dec 13
Regulate outcomes, not methods? But they're pretty much inextricable. Take today's banking sector scandal, one again involving mis-selling dodgy financial projects to unwary customers. With midlevel employees (the so-called "advisers") given grotesque incentives to persuade the suckers to buy. The "methods" include designing the flawed products, selling them,and designing the incentives to promote selling them badly. The outcomes are presumably the sales themselves. What should one expect of the regulators if their remit is only to look at the sales? Yes, they go after the banks and impose big penalties, only to have the miscreants go into hiding while they set up the next lot of exploitative methods. Maybe they have no choice but to try to prohibit the bad methods. In medical care, as you have written, it's fairly well established that by directly regulating methods, such as operating theatre cleanliness, immunising kids, keeping accurate clinical records, and so on -- the regulators can have l
Henning :: 12th Dec 13
Regulate outcomes, not methods? But they're pretty much inextricable. Take today's banking sector scandal, one again involving mis-selling dodgy financial projects to unwary customers. With midlevel employees (the so-called "advisers") given grotesque incentives to persuade the suckers to buy. The "methods" include designing the flawed products, selling them,and designing the incentives to promote selling them badly. The outcomes are presumably the sales themselves. What should one expect of the regulators if their remit is only to look at the sales? Yes, they go after the banks and impose big penalties, only to have the miscreants go into hiding while they set up the next lot of exploitative methods. Maybe they have no choice but to try to prohibit the bad methods. In medical care, as you have written, it's fairly well established that by directly regulating methods, such as operating theatre cleanliness, immunising kids, keeping accurate clinical records, and so on -- the regulators can have l
Henning :: 12th Dec 13
Why that posted thrice, I have no inkling. My sentence ended with: ...clear and lasting effects on patient care outcomes. By concentrating on outcomes (post surgical infections, kids with mumps, unco-ordinated services, etc), you risk producung a culture of blame such as we now see with this government and its handling of various reports of bad outcomes.
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