Covers a wide range of legal and other rules which apply to firms. Some come from national governments, some from the EU and some from trade associations which guarantee certain standards for their member firms. Regulation includes:
• health and safety regulations which might apply to electrical goods or to toys
• consumer protection which requires sellers to maintain standards
• employee protection which provides some guaranteed rights in the workplace
• competition law which requires firms to compete freely with one another
• rules for the privatised industries set up by their regulators , which watch prices and value for money.
Firms often complain of excessive regulation but modern societies have numerous reasons for maintaining extensive sets of rules. Compliance costs can be high but the rules protect large numbers of people. There is less regulation in the UK than in many other developed countries.
Bank regulation is currently under review as a consequence of the 2007–09 financial crisis. It is certain that it will be tightened in order to prevent the excessive lending that caused the problem; probably this will be to some extent a matter of international negotiation. Very big banks (those described as too big to fail) may be broken up.