The Role Of Financial Regulations

By Author: Fabiola Groshan
Total Articles: 2678
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Financial regulation is a supervision structure to whichthat all institutions in the fiscal and monetary sector are subject to. The system enforces certain restrictions, requirements and guidelines, designed to decree a high level of integrity and maintain it throughout the operations of the banking system and other financial institutions. Apart from imposing an incorruptible and principle based system, the role of these regulations is also to generate a clarity of relations between banks and clients, particularly in today’;s climate, a post banking crisis environment, where strong adjustments have to be made. Whether regulated by the government or any of the non- governmental organizations, financial institutions have no say in the matter and are prevented from market manipulation under penalty ofor violations under the laws.

The banking system is a key player in the economy, whether we are talking nationallly level or globally economy, which played a major part in the recent decisions of enforcing a stronger financial regulation., especially taking into consideration the great control that they posses and the associated ...
... The consequences of the a potential bankruptcy of such an institution or its failure to provide the intended meant services were initially seen during the , which partly happened in the banking crisis. There are issues and facts of general concern, because whether we like it or not, we are all dependent on the banking system. The great advantage of Ttoday's consumer has access toworld though is the free and facilitated access to information, as there are many channels and resources explaining the available from where we can get information and learn about the risks and benefits of the relationship with a bank or about latest economic news and trends. that can severely affect our financial stability

The role of financial regulation is five- folded. First, it aims to protecting the customers of a bank, its depositors, through a reduction in the risk level, which is obtained by a transparency in the relationship between clients and banks. Secondly, and this is highly connected to the post banking crisis climate, the structure has the objective of putting a stop to bank misusage, meaning criminal actions like money laundering. Thirdly, the financial regulation also aims at protecting confidentiality, by lowering the risk of disruption, which can be generated by adverse trading conditions, leading to systemic banking crisis. The fourth role of the regulations is increasing the forthrightness of banking operations, while the final one speaks to the proper direction of funds and credits towards sectors that are most in need of them.

All things considered, Tthe measures implied by the financial regulation were designed as to have a long lasting, beneficial effect on the entire financial system and economy, by increasing the level of liquidity and lowering the banks' authority and influence. But we live in a web-connected world., especially Ffrom an economic point of view, with all the globalization and e-commerce processes, which means that what happens to one side affects the other., so the Rrestrictions, thus, have had a great impact not only on banks and financial institutions, but on their collaborators and on the end consumers as well.

For more resources regarding banking crisis or even about financial regulation and especially about http://thespellmanreport.com/ please review these pages.