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.
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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)
“When she could hide him no longer she got a papyrus basket for him, and plastered it with bitumen and pitch; she put the child in it and placed it among the reeds on the bank of the river.”
—Bible: Hebrew, Exodus 2:3.
“Lots of white people think black people are stupid. They are stupid themselves for thinking so, but regulation will not make them smarter.”
—Stephen Carter (b. 1954)