Beyond 19: principle #22 for financial reform

22. No regulator shopping
Call it the principle of conservation of regulation. You shouldn't be able to sell insurance and be exempt from insurance regulations just because you also own a savings and loan. And the same should be true for any financial activity. Setting up shell companies and special-purpose thingamajigs should have no effect on the restrictions placed on actual economic activity. In physics it may be nearly impossible to follow the momentum of every particle in a complicated sequence of interactions. But every interaction obeys the principle of conservation of momentum, and concatenating momentum-conserving processes conserves momentum, so the total momentum remains the same. Likewise firms should be free to make a wide range of structural changes, but they should consist of elements that keep every regulation in effect that was in effect before the change.