Financial institution are subjected to particular stipulated requirements, guidelines, and restrictions. The primary aim of the regulation is to ensure that there is financial integrity. Government is the players that enforce the final regulations. People such as Chris Brummer have also facilitated the change of the financial system. Another reasons that have triggered the need for regulations is the emergence of many financial products.
Without regulations, the economy can be destabilized. The government need to regulate the financial system since everybody depends on it strictly. When there is regulation; people will be confident with systems. It also aims at ensuring that the financial system is stable and protected. Consumers have to earn the highest degree of protection. It is worth noting that the consumer will be unfairly treated; for example being overcharged on the credit cards.
The first institutions that are supervised are the banks and the financial services providers. They are set of rules that banks and financial services providers that are being established has to observe. They must operate with stringent guidelines. The banking system will then be smooth and efficient. One more thing that is regulated is investment management.
The financial regulators ensure that the companies that are listed comply with certain regulations. The listed companies are demanded to each year publish their financial statements and make them public. The aim of the regulation is to protect the investors; when they scrutinize the financial reports they can make informed decisions about their securities. Chris Brummer is among the finals professionals who have put a lot of effort to make sure 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. The other thing that you are supposed to do is implimentiosn of the regulations. When the financial institution does not comply with the regulations, there are two consequences that they can face. First it can face enforcement proceedings. In extreme situations it can be winded down or restructured.
There is a need to improve the financial regulations on regular basis. The aim is to ensure that the nation is safe. New financial products are created constantly, and thus there is need for new regulations to include them. Bill need to be introduced to strengthen the regulations.