Cognitive Regulatory Capture

By Edward Harrison On Feb 10, 2009

Cognitive Regulatory Capture

n. Psychology.

A condition of conflict or anxiety resulting from inconsistency between one’s duty as regulator and one’s actions, such as regulating the banking sector and trying to become well-liked by bankers. If the condition persists, CRC can mutate into an infectious disease, leading to euphoria and irrational exuberance. Can be fatal to the economy if allowed to continue for many years.

Known cures: independence, professional distance, integrity, deep recession, depression, Paul Volcker.

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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