Professor Edward Kane:

I did not originate the term "regulatory capture", although I certainly use it.

It goes back to an article in 1971 by a University of Chicago professor. The idea of regulatory capture is, one way or another, being able to dictate the policies of enforcement or the rules to the interests of the industry as opposed to the interests of the ordinary public citizen. It was initiated with respect to price-setting for utilities by utility commissions. The notion is that the utility companies dictated what the commission would ultimately adopt as prices. It is very evident in US banking. One of the issues concerns what is called the revolving door between government and regulation. The top regulators in the United States have migrated to one firm in great numbers, Promontory Financial Group, and blatantly advertise on their website that they have influence to deliver. It is about being able to influence or even dictate certain policies.