New Research on Spectrum, Maine's Regulatory Code, and the Regulatory Capture That Gave Rise to the Financial Crisis

Research Round-Up: January 24, 2018

American Spectrum Policy Should Allow More Compensation to Agencies for Clearing and More Geographic-Based Sharing

Brent Skorup | Public Interest Comment

From the comment: "Federal agencies are market participants for many indispensable inputs—including electricity, vehicle fleets, office supplies, and labor—but not, anomalously, for spectrum. Economic distortions arise because of the lack of price signals and the inability of agencies to transfer spectrum to commercial entities for compensation.”

A Snapshot of Maine Regulation in 2018

James Broughel | State Snapshot

From the snapshot: "State RegData also reveals that the 2018 CMR [Code of Maine Rules] contains 113,862 restrictions and 8.1 million words. It would take an individual about 449 hours—or more than 11 weeks—to read the entire CMR. That’s assuming the reader spends 40 hours per week reading and reads at a rate of 300 words per minute. By comparison, there are 1.09 million additional restrictions in the federal code. Individuals and businesses in Maine must navigate these different layers of restrictions to remain in compliance.”

The Recourse Rule: How Regulatory Capture Gave Rise to the Financial Crisis

Stephen Matteo Miller | Policy Brief

From the policy brief: "When it comes to financial reform since the crisis, narratives often focus on the excesses on the supply side of the financial system before the crisis, but the evidence discussed here explains how the demand for securitized assets factored into the last crisis. Why might demand have been so great for the securities that spread insolvency risk throughout the financial system? Part of the responsibility could lie with the Recourse Rule, which created incentives for the largest securitizing BHCs—which were heavily involved in commenting on the regulation during the notice-and-comment process—to hold more of the very assets that wiped out bank capital. Regulations can have unintended consequences.”