1. Financial regulation is a form of supervision, which subjects financial institutions to certain requirements, restrictions and guidelines. It aims to maintain the integrity of the financial system.
2. Financial regulations are in place to ensure that the markets run effectively. Government agencies are responsible for implementing and regulating policies.
3. An important function of financial regulation is to balance the interests of unsophisticated consumers of financial products and their sophisticated sellers. They also aim to protect consumers through safety regulations, especially where regulations are needed within the economic markets.
4. Not all professions are regulated. But individuals practicing a regulated profession need to be able to show evidence of registration with the appropriate regulatory body. Its purpose is to protect, promote and maintain the health and safety of the public by ensuring proper standards in the practice of finances.
5. Financial regulation in banking is to address concerns over the safety and stability of financial institutions and the financial sector as a whole, and the payments system. Mandatory deposit insurance schemes are introduced in order to avoid bank runs.
6. Financial sector regulation is important because it provides stability to the markets and serves to protect customers, workers and taxpayers from moral hazards that are inherent in certain decisions.
7. Financial regulation is to implement laws and rules that govern what financial institutions such as banks, brokers and investment companies can do. These rules are generally promulgated by government regulators or international groups to protect investors, maintain orderly markets and promote financial stability.
8. Financial regulation is regulatory requirements to protect the environment, workers, and consumers. This can then often lead to innovation, increased productivity, and new businesses and jobs.
9. Financial regulation can offer for the timely and accurate filing of report data by domestic and foreign financial institutions. Certain regulatory report information is used for public disclosure so investors, depositors, and creditors to better assess the financial condition of the reporting banks.
10. Financial regulation reviews seven areas often listed by governments and public-sector bodies as being major goals of financial regulation: investor protection, consumer protection, financial stability, market efficiency, competition, the prevention of financial crime, and fairness.