Interesting news out of California from earlier this year (still getting caught up, my apologies). Due to budget cuts, the California Department of Fish and Wildlife had to freeze the review of all new wetland and habitat banking applications in March 2012. Bankers and environmental consultants brought up a solution which had been proposed many times before in various forms, even without an application freeze, but it had always faced ethical questions and objections: application fees should be raised to cover the staffing costs of effective review.
California Senate Bill 1148 approved this system, and DFW is now firing on all cylinders again. Opponents of similar proposals have noted that it can look an awful lot like "buying your own regulator", setting up a fiscal incentive for a state agency to guarantee the general health of the mitigation banking sector. Earlier versions were less subtle: one proposal would have simply paid the salary of a full-time staffer at state or federal agencies directly out of a pot of money created by the bankers. I've always seen it at least in part from the bankers' side: they are desperate for effective and knowledgeable regulators who have lots of time to focus on banking, and they will pay for them if necessary. The truth is somewhere in between, but I've seen a lot of good faith from all sides in these kinds of situations.
More evidence of the real symbiosis between regulators and the regulated community, so distant from the purely-oppositional relationship that is usually assumed to exist. Could you imagine if Wall Street worked this way? Goldman Sachs and JP Morgan demanding legislation requiring them to hand over millions of dollars to ensure effective regulation of their activities? It's worth thinking about why it doesn't.
I think I've used my weekly quota of Futurama memes, but in this context it's hard not to point to this one.
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