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)
“I know a bank where the wild thyme blows,
Where oxlips and the nodding violet grows,
Quite overcanopied with luscious woodbine,
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There sleeps Titania sometime of the night,
Lulled in these flowers with dances and delight.”
—William Shakespeare (1564–1616)
“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)