One of the great successes of the deregulation policy was the opening of the telecommunications markets in the late 1990s. The result was an unprecedented drop in prices, which clearly showed how much consumers benefit from competition. While a long-distance call in the German landline network still cost an average of more than 30 cents per minute at the beginning of 1998, a few years later it was less than 2 cents. Of course, the opened telephone markets could not do without regulatory requirements either - on the contrary: in order for competition to function properly, a state regulatory authority not only had to remove the legal barriers to market entry in a first step, but also the previous monopoly with strict rules in a second step commitAllow competitors to use some central areas of their telecommunications infrastructure - of course against payment of (regulated) transmission fees.

Tillmann Neuscheler

Editor in business.

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The case shows that parts of the economy cannot work without regulation.

Sometimes the rules of the game prescribed by the state are even a prerequisite for more competition.

But sensible regulation is not only needed in the competitive economy.

In climate protection, the health sector and the financial sector, too, authorities often set rules.

But where should they set rules and where not?

And which rules are actually suitable for achieving a certain goal?

How should compliance be monitored?

Can we adopt good and tried-and-tested ideas from abroad?

And how can the rules be prevented from becoming the pawn of current political moods?

The Frankfurt School of Finance and Management intends to deal with such questions more intensively in the future.

To this end, a “Competence Center for German and Global Regulation” is being established at the private university, which is to start work in spring 2022.

The initiators of the center are the former Prime Minister of Hesse, Roland Koch, who has been a professor at the university for four years, and the legal scholar Julia Redenius-Hövermann, who also works there: “We are concerned with general knowledge about different regulatory approaches from which sector-specific rules can later be derived can “, says Koch in an interview with the FAZ

Deutsche Börse is one of the supporters

The approach should be interdisciplinary: the initiators say that knowledge is in demand from economists, lawyers and social scientists. Around ten existing professorships will be integrated into the center, including a blockchain expert, an environmental economist, a health economist, a financial scientist and a business philosopher. In addition, two new professorships are to be created initially: a professorship for economics, which will deal with the impact assessment of regulatory decisions. And a professorship for law with a focus on financial law and the law of regulated industries.

According to an internal position paper, the center should also provide scientific support to politicians in the search for “good regulation”. On the one hand, it should be about the "governance" of regulation, i.e. the question of which authorities should be responsible for regulation in which form, and the question of whether regulatory authorities are bound by instructions (such as the Federal Motor Transport Authority) or very independent of the Politics (like the Federal Cartel Office) should act. On the other hand, the competence center should deal with the “tools” of the regulatory authorities: where are command and obedience good, where are incentive-oriented rules better, and which sectors can be left to self-regulation. There is a great need for improvement, says Roland Koch. "Today regulation often causes exactly the opposite of what is intended."

The center is financed to 10 percent from funds from the Frankfurt School of Finance, 90 percent of the costs are met through contributions from supporters outside the university.

“There is broad support from industry,” says Koch.

The supporters include well-known large companies, including Deutsche Börse.

“The financing for the first five years is secured,” says Koch.