Menu
Home
People
Places
Arts
History
Plants & Animals
Science
Life & Culture
Technology
Reference.org
Regulated market
open-in-new
<p>A regulated market (RM) or coordinated market is an idealized system where the government or other organizations oversee the market, control the forces of <a href="/facts/Supply_and_demand/KprL1fvc">supply and demand</a>, and to some extent regulate the market actions. This can include tasks such as determining who is allowed to enter the market and/or what prices may be charged. The majority of <a href="/facts/Financial_market/T8g8qFT5">financial markets</a> such as <a href="/facts/Stock_exchange/lTJvjyVW">stock exchanges</a> are regulated, whereas <a href="/facts/Over-The-Counter_Market/tp6s0kEW">over-the-counter markets</a> are usually not at all or only moderately regulated. </p><p>One of the reasons for regulation can be the importance of the regulated activity – meaning the harm suffered should the industry fail would be so fatal that <a href="/facts/Regulatory_agency/VXSrsDSM">regulators</a> (<a href="/facts/Government/N4bYL0VC">governments</a>, <a href="/facts/Legislator/skEuCLNc">legislators</a>) cannot afford the risk. This includes fields like <a href="/facts/Banking/l7VsKwas">banking</a> or <a href="/facts/Financial_services/azqCQelN">financial services</a>. Secondly, it is common for some markets to be regulated under the claim that they are <a href="/facts/Natural_monopoly/Mgy20eU3">natural monopolies</a>, or that a <a href="/facts/Monopoly/BXIQWUmR">monopoly</a> would very likely appear should there be no regulation. It is crucial to prevent misuse of <a href="/facts/Monopoly_power/BXIQWUmR">monopoly power</a>, as this can lead to delivery of poor services with very high prices. This includes for example the <a href="/facts/Telecommunication/vxoj1cxR">telecommunications</a>, <a href="/facts/Water_industry/1Xgk5CCF">water</a>, <a href="/facts/Petroleum_industry/xCKs0yQJ">gas</a>, or <a href="/facts/Electric_power_industry/xwabxdhN">electricity supply</a>. Often, regulated markets are established during the partial <a href="/facts/Privatisation/TAtreKqK">privatisation</a> of government controlled <a href="/facts/Public_utility/BzslJKc3">utility</a> assets. </p><p>A variety of forms of regulations exist in a regulated market. These include controls, <a href="/facts/Regulation/eFR0l2x9">oversights</a>, <a href="/facts/Anti-discrimination/B2M2HqxR">anti-discrimination</a>, <a href="/facts/Environmental_protection/HoD7nCUq">environmental protection</a>, <a href="/facts/Taxation/8cXNkA00">taxation</a>, and <a href="/facts/Labor_law/qrSVP8oh">labor laws</a>. </p><p>In a regulated market, the government regulatory agency may legislate regulations that privilege <a href="/facts/Special_interests/7oNDHtPI">special interests</a>, known as <a href="/facts/Regulatory_capture/quzEChG3">regulatory capture</a>. </p>