U.S. Financial Regulatory Policy for Banking and Securities Markets

Financial regulation is a type of regulation that deals with finances. It deals with financial institution by giving them certain requirements. This helps in ensuring the financial system is transparent and accountable. The system can either be government or non-government.

The reason there is need to regulate the finance is to ensure people are confident about the financial system. It also ensure there will not come a time where the financial system will instable. It is meant to protect clients and their money. It helps in stabilizing the financial markets.

When it comes to finance, it is crucial to be careful hence need of policies. The system formed to regulate banks and security market is meant to ensure what once is complicated is much simpler. One of the things you need to know is that the financial services is divided into many federal, state agencies making it much simpler. Each agent is meant to be responsible for certain regulation. Some agents are usually meant to regulate the behaviors that can lead to risk or conflict. Others just enforce the existing regulation. In case of financial system failure this agents are reliable. They can be sued.

There are different ways one can regulate finance in US. This include: Stock exchange where it is regulated by the exchange act. This is a business that one can benefit from or lose from within seconds, hence it is crucial for it to be regulated. It deals with the asset trade, pricing and monitoring the whole trade process.

Another category is the bank as well those who offer financial services. They have bank regulations that they observe in their day to day transaction. Many bank have fallen because of not being able to meet the standard. The regulation affects the bank structure, this includes the interest rates and the variety of finance offers.

Listed companies also have regulation. It is also known as the trading act. They are regulated to ensure any investor who would want to invest should know what they are up to. They get all the information required to invest.

There is also regulation for the assets as well as investments. This ensure there will be no conflict in terms of possession. Each regulation mission for the different agencies differ. The different agencies have power over different firms, market or even activities. Some firm have to answer to more than one financial regulator. However some firms do experience regulatory gap, this is where a financial is not under any financial regulator.

One can also regulate systematic risks. Now a firm can take risks in case it is worth. The consequences may lead to the finance system instability. Hence it is their responsibility to oversee the parts of the financial system, ensuring there is no risk to the stability of the financial system.

Seen in the previous years, financial instability can lead to the downfall of an economy. Financial regulation is meant to protect you and me who are the investor or the borrower when we are in the financial market dealings. This gives you a clear picture of why U.S finance regulation is important.