Deregulation is the act or process of removing restrictions, laws, and regulations. This term is mostly used in the economic sector, when economic regulations, imposed by the government, are reduced or eliminated in a particular industry. Very often this is done with the purpose of creating more competition within the industry and to allow market forces to drive the economy. An example of deregulation is when government eliminates a statute that requires banks to keep a certain percentage of deposits in liquid assets and allows the banking industry to set their own liquidity ratio and types of financial products they offered.
