Objectives of Bank Regulation
The objectives of bank regulation, and the emphasis, vary between jurisdictions. The most common objectives are:
- Prudential—to reduce the level of risk to which bank creditors are exposed (i.e. to protect depositors)
- Systemic risk reduction—to reduce the risk of disruption resulting from adverse trading conditions for banks causing multiple or major bank failures
- Avoid misuse of banks—to reduce the risk of banks being used for criminal purposes, e.g. laundering the proceeds of crime
- To protect banking confidentiality
- Credit allocation—to direct credit to favored sectors
- to provide the best customer service in this competitive age.
Read more about this topic: Bank Regulation
Famous quotes containing the words objectives, bank and/or regulation:
“Along the journey we commonly forget its goal. Almost every vocation is chosen and entered upon as a means to a purpose but is ultimately continued as a final purpose in itself. Forgetting our objectives is the most frequent stupidity in which we indulge ourselves.”
—Friedrich Nietzsche (1844–1900)
“O Gold! I still prefer thee unto paper,
Which makes bank credit like a bark of vapour.”
—George Gordon Noel Byron (1788–1824)
“Nothing changes my twenty-six years in the military. I continue to love it and everything it stands for and everything I was able to accomplish in it. To put up a wall against the military because of one regulation would be doing the same thing that the regulation does in terms of negating people.”
—Margarethe Cammermeyer (b. 1942)