This goes beyond banking, of course. If Allstate Insurance Co., to take a name at random, doesn’t pay post-Katrina insurance claims, to take hypothetical situation, it will outperform competitors, especially in a laissez-faire regulatory environment that doesn’t require insurers to disclose their claims performance. Meanwhile, confidence in the insurance industry as a whole erodes.

In mining, one player, absent regulation, will always want to cut corners on worker safety, outperforming others who resist the temptation.

In the nuclear industry, one company will delay that maintenance work while others won’t. And so on.

More to our purposes, inadequate regulation presents a journalism problem.

We have regulators. Let’s cover them.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.