Financial institution are subjected to particular stipulated requirements, guidelines, and restrictions. Regulation is necessary to make sure that there is integrity. Government is the players that enforce the final regulations. People such as Chris Brummer have also facilitated the change of the financial system. Today, many financial products have emerged, and thus they need to be regulated.
One of the reasons why the economy of a nation tend to unstable us due to lack of rules. The government need to regulate the financial system since everybody depends on it strictly. The first objective of the rules is to ensure that there is the confidence of the system. The system will be stable and protected after the protection. The consumers also have to receive a high h degree of protections. The consumers will be unfairly treated when the system has no rules; for instance, their credit cards can be subjected to very high charges.
Banking and the service providers are the most regulated institutions. They are set of rules that banks and financial services providers that are being established has to observe. Also, their operations must also be under particular laws. The result is a robust and efficient banking system since there is no unwelcomed development that may disrupt the smooth running of the banking industry. The government has also to regulate investment management.
The financial regulator has put a lot of effort into ensuring that listed companies comply with the regulations. They are supposed to annually publish their financial reports and make them available to their shareholders. The aim of the regulation is to protect the investors; when they scrutinize the financial reports they can make informed decisions about their securities. There are financial, and security professionals like Chris Brummer has participated in ensuring that the investors are safe. One more thing has had been put under rules is stock exchange market; the exchange should be conducted correctly to ensure that there are smooth operations.
Every company that deals with finances must ensure that they abide with the rules that have been set by the government; if they do not, they will face various consequences. Before you begin offering financial services, the first step is to ensure that you understand the rules and the laws. You are then required to implement them in your organization. When a financial institution is not compliant with the rules, two steps can be taken. First it can face enforcement proceedings. In other situations, the firm can be restructured or winded down.
There is a need to improve the financial regulations on regular basis. The aim is to ensure that the nation is safe. It is worth noting to note that new financial product need to be included in the financial regulations. Bills need to be added to enhance the financial regulations.