Regulated activities are hard to distinguish from the prohibited ones they resemble

Evidence

After three years of arduous deliberation, federal regulators produced a revised Volcker Rule designed to rein in risky trading that can result in disastrous bank losses (Eavis, 2013). The new rule prohibits banks from trading depositors’ money with taxpayer backing for the banks’ own profit. However, it is difficult to distinguish allowable trading that benefits depositors from proprietary trading for banks’ own profit. Compromises in drafting the Volcker Rule created exemptions that left many potential loopholes for circumventing the regulations. — Albert Bandura, Moral Disengagement, 1545

Categorization

• XREF: Connects to the general theme of regulatory capture and rule-drafting gaming — echoes the Champagne Fairs’ controlled-entry enforcement logic where precise rules created loopholes. — connects to: Total bans like Prohibition fail without corresponding enforcement capacity — Lawrence M. Friedman and Grant M. Hayden, American Law: An Introduction, 820