Market regulation

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Under market regulation (or market intervention ) one understands in the context of process policy the state monitoring and control of the market activity and the market development as well as the influencing of the market behavior of the market participants by legal norms and the involvement of specific regulatory authorities in order to fulfill the state goals .


The word market regulation is a compound that is made up of the market as the meeting of supply and demand for an economic good and “regulation” as order ( Latin regular , “regulate, order”). According to Arnold Picot , regulation means “that the state imposes restrictions on private activity”. This can be done through laws, ordinances or other means that set the framework for action. Not all market participants in an economy are subject to the same restrictions, but these only affect certain market segments (“sector-specific regulation”). Market regulation is a form of process policy and is justified with market failure .

In market economy systems, the principle applies that supply and demand are balanced by price and that the markets should develop freely ( market freedom ). This economic order makes exceptions, however, if the market structure leads to structural undesirable developments in a sub-market or the state intervenes because of the importance of the sub-market for the entire economy. The state tries to correct structural undesirable developments through interventions (agricultural market); in the case of economically significant sub-markets, it makes market entry of market participants dependent on the overcoming of legal market entry barriers ( financial market ). Market regulation is understood as an alternative between the extreme positions of a free (unregulated) market economy and communism . In the central administration economy, market regulation is part of regulatory policy .

The term regulation is neither used nor defined uniformly in science and practice; it is largely shaped by American literature. The term has only existed in German commercial administrative law since around 1990, although forms of regulation have existed in Germany since the 19th century.


The oldest of all urban rights is the right of measure and market , which the bishops usually reserved for their cities. In this way, Strasbourg received market rights in 876, Trier 902, Magdeburg 965, Bremen 966, Mainz 974, Speyer 982, Passau 999 or Osnabrück 1002. With the market right, the sovereigns granted the right to hold a permanent market, a weekly or a fair . Already in the Middle Ages there were Europe-wide principles of market law as well as efficient local market regulations , "in which not only is disposition based on the intended market price, but everything is taken care of and arranged that is useful for market freedom and justice". The guilds there deprived the merchants of any incentive to aggressively sell goods by means of comprehensive market regulation. Guilds dominated the market, divided production evenly among guild members and ensured constant income. About guilds regulating the found professions and vocational training in the craft instead of by they established who master was, where he set up his business or how many companions he could employ.

At the instigation of Archduke Charles II , the Steyr “Compagnie or civil iron trading company” was founded in 1581 with the aim of jointly buying iron and steel for the purpose of market regulation and financial security for the hammer mills. In this market regulation, the state appeared as a buyer, which is a model for the later foreign exchange market interventions by the central banks . Jacques Savary pointed out in 1675 that business couldn't live without order , even if you had all the necessary knowledge.

Adam Smith , in his book The Prosperity of Nations (March 1776), demanded that the state should not intervene in the market , but only shape the framework conditions so that the markets function and competition is secured. The market economy can therefore only function through state measures such as market regulation, because it cannot organize and stabilize itself. Because the market failure ( english market failure ) can not be solved by the market participants themselves. That is why there were first approaches to regulation through state concessions for railways, for example through the English "London-Birmingham Railway Act" of May 1833. In the USA, regulation at the federal level also developed for the railways around 1880. They wrote most of them private railway companies with concessions the market organization with which they had to operate the railway.

Since 1844 Karl Marx used the topos of the “anarchy of the market” or the “anarchy of production” in his criticism of capitalism . He denounced the " concentration of capital and landed property , overproduction , the crises , the necessary downfall of the small burghers and peasants, the misery of the proletariat, the anarchy in production ...". In his main work Das Kapital. Volume I , in 1863, Marx spoke of “the anarchy and catastrophes of capitalist production by and large…” and of capitalists “who recognize no authority other than that of competition”. Marx assumed the licentiousness of the markets and capitalists who could indulge their greed for profit in an uncontrolled manner .

Marver H. Bernstein found out in 1955 that market regulations over long periods of time often lead to a situation known as capture , which is characterized by the fact that the regulator, through intensive cooperation with the regulated company, accepts its point of view and effective regulation no longer takes place . Since the founding of the EEC in March 1957, the term market regulation received an interventionist content, because the EEC intervened in the agricultural market by buying up the overproduction of agricultural products (milk and dairy products) through production quotas to stabilize prices (" Butterberg ", " Milchschwemme "). In order to include agricultural products in the free movement of goods in the newly founded EEC and at the same time to receive public support for agriculture, the previous national intervention mechanisms were transferred to the level of the EEC. The Treaty on the Functioning of the European Union (TFEU), which came into force in December 2009, also provides for the stabilization of the markets in Art. 39 (1c) TFEU.

The normative theory of regulation, founded by George Stigler in 1971, assumes that the state always intervenes in the markets when it can eliminate grievances and improve the common good . In the analysis of the reason for the establishment of regulation, two strands of theory are distinguished. Stigler's positive approach assumes that regulation is brought about by the market participants themselves. He was awarded the Nobel Prize for Economics for his theory that regulation itself is in great demand . The normative theories, on the other hand, see market failure as an occasion. All theories, however, refer only to the various forms of regulation in the United States. Originally the regulation was based on the market failure of natural monopolies . In 1976, Samuel Peltzman contrasted this theory with the positive theory of regulation, in which the regulator also pursues his own benefit .

Above all, economic crises , financial crises or banking crises have contributed to the implementation or tightening of regulations in the financial sector. The American Glass-Steagall Act of February 1932 reacted to the Great Depression that began in October 1929 , the German banking crisis of June 1931 brought about the introduction of the Banking Act in January 1935. The foreign exchange market interventions of the central banks, especially in the era of freely fluctuating exchange rates ( "Floating" ) from March 1973 were considered massive market regulation, not through laws, but through operational interventions in the market to stabilize exchange rates. As a result, the insolvency of the Herstatt Bank in June 1974 led to improved deposit protection and, in August 1974, to Principle Ia , which forced credit institutions to limit their open positions in foreign exchange and precious metals in a certain ratio to the liable equity . The financial crisis that began in 2007 triggered regulations such as Basel II with the Solvency Regulation (SolvV) and the minimum requirements for risk management (MaRisk) in all EU member states , which came into force in January 2007. The Capital Adequacy Ordinance replaced the SolvV in January 2014 and is considered the most comprehensive allocation of banking transactions and credit risks of credit institutions in all EU member states.

Market regulation tasks

Market regulation deals primarily with three main areas, namely monopoly , negative externalities and information asymmetries :

In these cases, regulatory tasks are often carried out by a regulatory authority; the main thing to be mentioned here is the safeguarding of an adequate infrastructure, which also guarantees a supply during peak loads; ensuring a comprehensive supply. Companies have a natural interest in preferably supplying lucrative metropolitan areas ( cherry-picking ); supplying less attractive areas can be considerably more cost-intensive. For this reason, such monopolists are often legally obliged to enter into a contract , which means that the company cannot refuse to provide services to any (wealthy) citizen. Consumer protection is also provided by checking the terms and conditions and maximum price regulation . So that a monopolist cannot exclude potential competitors from using the network, network access regulations are often made, especially market access , price and tariff regulations.
  • Negative externalities occur when individual market participants pass financial or other burdens on to uninvolved third parties and thus generate social costs (for example, the pollutant emissions of a chemical plant damage neighboring fruit growing). Externalities are therefore uncompensated effects of economic decisions on uninvolved market participants. These uncompensated effects can be negative or positive. Negative externalities result in a production volume above the social optimum, positive externalities a production volume below the social optimum. In the case of externalities, the aim of market regulation is to internalize uncompensated effects through various instruments. Negative externalities can result from monopoly formation and can result in environmental pollution or damage to health . Market regulation takes place here, for example, through immission law .
environmental pollution
Possible regulatory measures are: statutory regulations on the environmental compatibility of technical systems, taxation of pollutant emissions or emissions trading .
The Finance consists mainly of banks and insurers , on the financial markets as market participants act. In the past, unregulated financial markets have repeatedly caused severe financial and economic crises . For example, the leading Black Thursday or in Europe, the Black Friday of 1929 to the Great Depression and the Great Depression . The financial crisis from 2007 onwards was also exacerbated by deregulations and inadequate financial market regulations. Regulatory measures are here u. a. To force financial market supervision , banking regulation or systemically important banks to form capital reserves by law, so that in the event of a financial crisis no rescue operation at taxpayer costs is necessary. The regulation of the insurance markets is mainly justified by the specifics of the insurance product and the production process . Special features are the high information asymmetry between policyholder and insurer and the special creditor position of the policyholder, who are to be particularly protected by Solvency II .
In all EU Member States of the dipped regulated market in relation to the Directive 2004/39 / EC on markets in financial instruments , which in Germany with the Financial Markets Directive Implementation Act (FRUG) in November 2007 in German law transformed was. The legal term "regulated market" has since replaced the "official market" and the "regulated market" , which no longer exist.
Research and technology
When a company develops a new technology or a scientist makes a new discovery , other companies or other scientists can benefit from that innovation without compensation for the original inventor. Regulatory measures are here u. a. Subsidies or patents .

In some cases, regulation is seen as a prerequisite and framework for the market beyond the fight against market failure in its “guarantee function”. Market access for certain branches of the economy is generally restricted in many countries by market regulation. For example, credit institutions require a banking license ( section 32 (1) sentence 1 KWG ) or insurers require a license ( section 8 (1) VAG ) from BAFin , without which entry into the financial market is not possible. Special markets such as the stock exchanges ( securities or commodities exchanges ) are subject to statutory framework conditions, in Germany since January 1897 by the Stock Exchange Act . Market regulation also includes maximum prices , minimum prices or government measures to the detriment of or in favor of exports ( export restrictions ) or imports ( import quota ) to or from abroad.


The state can react to market failures or market disruptions (such as monopolies , dominant positions or other market power ) through market law, market organization, interventionism ( state interventionism ), market barriers , regulatory authorities ( cartel authorities , banking supervision , Federal Network Agency ) or mere moral appeals . Market regulation thus serves to protect market participants, in particular consumer protection and safeguarding competition. It can foreclose markets or privilege or hinder certain market participants.

See also

Individual evidence

  1. ^ Arnold Picot, Theories of Regulation and Their Importance for the Regulatory Process , 2008, p. 9
  2. ^ Arnold Picot, Theories of Regulation and Their Importance for the Regulatory Process , 2008, p. 9
  3. Jamal Ibrahim Haidar, Impact of Business Regulatory Reforms on Economic Growth, in: Journal of the Japanese and International Economies, Elsevier, vol. 26 (3), p. 285-307
  4. ^ Duden Wirtschaft from A to Z: Basic knowledge for school and study, work and everyday life , 4th edition, Mannheim, Bibliographisches Institut 2009, license edition Bonn: Federal Agency for Civic Education 2009, keyword: regulation
  5. Roman Michalczyk, European origins of the regulation of competition , Mohr Siebeck, 2010, ISBN 978-3-16-150638-3 , p. 11
  6. ^ Roman Michalczyk, European Origins of the Regulation of Competition , Mohr Siebeck, 2010, ISBN 978-3-16-150638-3 , p. 10 f.
  7. ^ Gottfried Peter Rauschnick, Das Bürgererthum und Städtewesen der Deutschen im Mittelalter , Volumes 1-3, 1829, p. 34
  8. Brothers Grimm , German Dictionary , Volume 12, 1885, Col. 1653 ff.
  9. Christoph Reymann, The special private law of commercial and consumer contracts , 2009, p. 101
  10. Karin Rebmann / Walter Tenfelde / Ernst Uhe, Vocational and Business Education , 1998, p. 61
  11. Rudolf Holbach / Michel Pauly (eds.), Städtische Wirtschaft im Mittelalter , 2011, p. 314
  12. ^ Jacques Savary, Le parfait négociant , 1675, p. 177
  13. ^ Adam Smith, The Wealth of Nations , 1776/2003, p. 452
  14. Steven P. Croley, Theories of Regulation , in: Columbia Law Review vol. 98, 1998, p. 12
  15. ^ Roman Michalczyk, European Origins of the Regulation of Competition, 2010, p. 3
  16. ^ Karl Marx / Friedrich Engels , Briefwechsel , 1842/1948, p. 484 f.
  17. ^ Karl Marx, Das Kapital , Volume 1, 1863, p. 377
  18. Marver H. Bernstein, Regulating Business by Independent Commissions , 1955, S. 1 ff.
  19. European Parliament, Fact Sheets on the European Union, 2017
  20. George Stigler, The Theory of Economic Regulation , in: Bell Journal of Economics and Management Science, vol. 3, 1971, pp. 3-18
  21. ^ Richard A. Posner , Theories of Economic Regulation , in: Bell Journal of Economics and Management Science vol. 5, 1974, p. 326
  22. Roman Michalczyk, European origins of the regulation of competition , Mohr Siebeck, 2010, ISBN 978-3-16-150638-3 , p. 11
  23. Jürgen Müller / Ingo Vogelsang, Staatliche Regulierung , 1979, pp. 36–41
  24. Sam Peltzman, Toward a More General Theory of Regulation , in: The Journal of Law and Economics vol. 19, 1976, pp. 211 ff.
  25. Arthur Benz / Susanne Lütz / Uwe Schimank / Georg Simonis (eds.), Handbuch Governance , 2007, p. 74 f.
  26. ^ Walter Eucken, Principles of Economic Policy , 1952, p. 295
  27. Roland Czada, Markt in: Arthur Benz / Susanne Lütz / Uwe Schimank / Georg Simonis (eds.), Handbuch Governance , 1st edition 2007, GWV Fachverlage GmbH, ISBN 978-3-531-14748-2 , pp. 73 f .
  28. ^ Gerhard Baumgartner, Outsourcing and Public Service , Springer-Verlag, 2006, ISBN 978-3-211-31115-8 , p. 125
  29. ^ N. Gregory Mankiw , Grundzüge der Volkswirtschaftslehre , 3rd ed., Stuttgart, 2004, pp. 221–227
  30. ^ N. Gregory Mankiw, Principles of Economics , 6th Edition, South-Western College Publications. P. 201
  31. Roland Czada, Markt in: Arthur Benz / Susanne Lütz / Uwe Schimank / Georg Simonis (eds.), Handbuch Governance , 1st edition 2007, GWV Fachverlage GmbH, ISBN 978-3-531-14748-2 , p. 74
  32. Bodo Sturm / Carsten Vogt, Umweltökonomik , Physica-Verlag, 2011, ISBN 978-3-7908-2642-5 , p. 99
  33. OECD , Economic Outlook Vol. 2011/1 , Number 89, May 2011, OECD Publishing, ISBN 978-92-64-09252-5 , p. 342
  34. Roland Czada, Markt in: Arthur Benz / Susanne Lütz / Uwe Schimank / Georg Simonis (eds.), Handbuch Governance , 1st edition 2007, GWV Fachverlage GmbH, ISBN 978-3-531-14748-2 , p. 74
  35. Thomas Rabe, Liberalization and Deregulation in the European Single Market for Insurance , 1997, p. 329
  36. ^ N. Gregory Mankiw, Principles of Economics . 6th edition, South-Western College Publications. P. 201 f.
  37. Roland Czada, Markt in: Arthur Benz / Susanne Lütz / Uwe Schimank / Georg Simonis (eds.), Handbuch Governance , 1st edition 2007, GWV Fachverlage GmbH, ISBN 978-3-531-14748-2 , p. 74
  38. ^ Josef Ruthig / Stefan Storr : Public Commercial Law . Verlag CF Müller, Heidelberg 2008, ISBN 3-8114-8110-X , p. 15, fn. 81