A regulated market (RM) or coordinated market is an idealized system where the government or other organizations oversee the market, control the forces of

supply and demand In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labo ...

, 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.''Encyclopedia of Management'', Pennsylvania State University, Gale, 2009, p. 31. The majority of

financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial markets ...

such as

stock exchanges A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...

are regulated, whereas over-the-counter markets are usually not at all or only moderately regulated. 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 regulators (

governments A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is ...

legislators A legislator (also known as a deputy or lawmaker) is a person who writes and passes laws, especially someone who is a member of a legislature. Legislators are often elected by the people of the state. Legislatures may be supra-national (for e ...

) cannot afford the risk. This includes fields like

banking A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companie ...

. Secondly, it is common for some markets to be regulated under the claim that they are natural monopolies, or that a

monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...

would very likely appear should there be no regulation. It is crucial to prevent misuse of monopoly power, as this can lead to delivery of poor services with very high prices. This includes for example the

telecommunications Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than tha ...

water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as ...

, gas, or electricity supply. Often, regulated markets are established during the partial

privatisation Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...

of government controlled

utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...

assets. A variety of forms of regulations exist in a regulated market. These include controls, oversights, anti-discrimination,

environmental protection Environmental protection is the practice of protecting the natural environment by individuals, organizations and governments. Its objectives are to conserve natural resources and the existing natural environment and, where possible, to repair da ...

taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, o ...

, and

labor law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...

s. In a regulated market, the government regulatory agency may legislate regulations that privilege special interests, known as

regulatory capture In politics, regulatory capture (also agency capture and client politics) is a form of Political corruption, corruption of authority that occurs when a political entity, Legislator, policymaker, or regulatory agency, regulator is co-opted to serve ...

Changes in regulation

Regulation is subject to changes over time, due to both technological advances as well as the change in attitude towards regulation in general. An example for industries that are no longer regulated is the rail service or airlines in the US. On the other hand, there are also industries that did not need regulation in the past, but are in need of it now. This includes for example the real estate market. Another category are the markets that encountered major changes in regulatory approaches due to various

crises A crisis (plural, : crises; adjectival form, : critical) is either any event or period that will (or might) lead to an unstable and dangerous situation affecting an individual, group, or all of society. Crises are negative changes in the human ...

. A prime example are

following stock market crashes. The practice of regulating markets dates back centuries when ancient societies relied on standardised weights and measurements and practised punishment for theft and fraud. For the most part, market regulations have been imposed by the central governments and to a lesser extent by interest groups. One notable example of such interest groups is medieval

guilds A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...

. They were associations of

merchants A merchant is a person who trades in Commodity, commodities produced by other people, especially one who trades with foreign countries. Historically, a merchant is anyone who is involved in commerce, business or trade. Merchants have operated fo ...

and artisans that controlled the practise of their profession in their particular area. Guilds defined requirements for practising their profession, which usually meant that only guild members could practise their profession or sell their goods within their city. Since the beginning of the 20th century, labour groups at times have had regulatory roles in some markets.

Controversy

Generally, regulation is a very polarising issue. Those who are in favour of regulating usually see it as beneficial to the wider society. This has to do for example with regulations targeting

ecological Ecology () is the study of the relationships between living organisms, including humans, and their biophysical environment, physical environment. Ecology considers organisms at the individual, population, community (ecology), community, ecosy ...

, racial, or

religion Religion is usually defined as a social- cultural system of designated behaviors and practices, morals, beliefs, worldviews, texts, sanctified places, prophecies, ethics, or organizations, that generally relates humanity to supernatural ...

related issues. On the contrary, those against regulation see it as a tool for

lobbying In politics, lobbying, persuasion or interest representation is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies. Lobbying, whic ...

or as a source for creating

unfair competition Unfair may refer to: * Double Taz and Double LeBron James in multiverses '' fair''; unfairness or injustice * ''Unfair'' (drama), Japanese television series * '' Unfair: The Movie'' * Unfair (song), a song by South Korean boy group EXO