This week’s essay will compare a single regulation against my list of principles for effective regulation of emerging technology. We’ll use an existing regulation as our example, since existing regulations don’t change too frequently, so this essay should stay fairly evergreen.
This essay is a tribute to how nearly any topic is there for the taking on Substack. This was a fabulous explanation and explored the balance of risk and reward. One of my favorite authors (on a wide breadth of topics) is Michael Lewis. His book "The Flash Boys" was about program trading and creating advantage by having the least delay in the computerized trading systems. While far from his most famous book it was enlightening and entertaining. It also touched on the proprietary systems inside the investment Bank trading systems (like Goldman) where pools of trades might be order-manipulated in order to manage the amounts inside the system known as the dark pools where there wasn't any clarity or transparency. Preferred clients might benefit from ordering of the trades in the pool for example and since it was not transparent, it was likely an unfair market condition. You managed in this once through on a rule to make it easy to understand and relate to my LIMITED understanding. That is a talent. If you keep this up we will have to refer to you as a quant :)
This was an interesting analysis, thank you. Although you're right about the value of looking at a good regulation, I also think it would be interesting to see some analysis of bad regulations. I'm wondering about some of New Zealand's Health and Safety legislation now. Not sure if it's good or bad, people complain a lot, but then they complain if something goes wrong because people didn't have adequate Health and Safety too.
Hi Melanie, I might walk through some proposed AI and climate regulations in the future, but would rather do it during public comment periods, when it's most possible to change what's bad.
I'd be totally interested to hear your view on some of NZ's regulations; I learn a lot by reading through the US regs and seeing if they're over-broad or well-targeted, overly rigid or readily applicable, identify the root causes or focus on symptoms, are likely to be effective or drive activity underground/elsewhere, and so on.
That would be fascinating, I'd love to get your take on that.
In the area I've worked, there are two pieces of legislation which are fascinating, both with massive flaws. Not that they don't have good points but there are bits which are... interesting.
It is! So many regulations aren't labeled something like, "Regular Person Protection Rule," but have that effect behind the scenes. (And then, trickily, some that *seem* more clearly labeled have less of a beneficial effect - though most *are* helpful!)
This essay is a tribute to how nearly any topic is there for the taking on Substack. This was a fabulous explanation and explored the balance of risk and reward. One of my favorite authors (on a wide breadth of topics) is Michael Lewis. His book "The Flash Boys" was about program trading and creating advantage by having the least delay in the computerized trading systems. While far from his most famous book it was enlightening and entertaining. It also touched on the proprietary systems inside the investment Bank trading systems (like Goldman) where pools of trades might be order-manipulated in order to manage the amounts inside the system known as the dark pools where there wasn't any clarity or transparency. Preferred clients might benefit from ordering of the trades in the pool for example and since it was not transparent, it was likely an unfair market condition. You managed in this once through on a rule to make it easy to understand and relate to my LIMITED understanding. That is a talent. If you keep this up we will have to refer to you as a quant :)
Thanks, Mark! I like Michael Lewis' books though haven't read all of them yet. I enjoy writing about regulation and am happy that's coming through :-)
I love Michael Lewis's books on financial topics. Really interesting stuff. I think I liked Boomerang best.
I loved Boomerang -- his take on Germany still has me in stitches
This was an interesting analysis, thank you. Although you're right about the value of looking at a good regulation, I also think it would be interesting to see some analysis of bad regulations. I'm wondering about some of New Zealand's Health and Safety legislation now. Not sure if it's good or bad, people complain a lot, but then they complain if something goes wrong because people didn't have adequate Health and Safety too.
Hi Melanie, I might walk through some proposed AI and climate regulations in the future, but would rather do it during public comment periods, when it's most possible to change what's bad.
I'd be totally interested to hear your view on some of NZ's regulations; I learn a lot by reading through the US regs and seeing if they're over-broad or well-targeted, overly rigid or readily applicable, identify the root causes or focus on symptoms, are likely to be effective or drive activity underground/elsewhere, and so on.
That would be fascinating, I'd love to get your take on that.
In the area I've worked, there are two pieces of legislation which are fascinating, both with massive flaws. Not that they don't have good points but there are bits which are... interesting.
Great explanation. Sounds like a helpful regulation for the average consumer.
It is! So many regulations aren't labeled something like, "Regular Person Protection Rule," but have that effect behind the scenes. (And then, trickily, some that *seem* more clearly labeled have less of a beneficial effect - though most *are* helpful!)