tailieunhanh - Lecture Money and capital markets: Financial institutions and instruments in a global marketplace (8th edition): Chapter 18 - Peter S. Rose

Chapter 18 - The regulation of the financial institutions’ sector. After completing this chapter, students will be able: to explore why financial institutions are one of the most regulated industries in the modern world; to discover the many types of regulation, and to understand how the financial institutions have been affected; to understand how regulation has influenced and shaped the structure of financial-services industries. | Money and Capital Markets 18 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Regulation Of The Financial Institutions’ Sector Learning Objectives To explore why financial institutions are one of the most regulated industries in the modern world. To discover the many types of regulation, and to understand how the financial institutions have been affected. To examine the recent global trend toward deregulation. The Reasons Behind Regulations Concern for the safety of the public’s funds. To promote public confidence in the system. To ensure equal opportunities and fairness in the public’s access to financial services. To prevent excessive money creation, and hence excessive inflation. To aid “disadvantaged” economic sectors. To ensure that important financial services are provided reliably and at a reasonable cost. Do Regulations Benefit or Harm Financial Institutions? . | Money and Capital Markets 18 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Regulation Of The Financial Institutions’ Sector Learning Objectives To explore why financial institutions are one of the most regulated industries in the modern world. To discover the many types of regulation, and to understand how the financial institutions have been affected. To examine the recent global trend toward deregulation. The Reasons Behind Regulations Concern for the safety of the public’s funds. To promote public confidence in the system. To ensure equal opportunities and fairness in the public’s access to financial services. To prevent excessive money creation, and hence excessive inflation. To aid “disadvantaged” economic sectors. To ensure that important financial services are provided reliably and at a reasonable cost. Do Regulations Benefit or Harm Financial Institutions? Regulations subsidize the growth of financial institutions and protect them from competition. Regulations tend to increase public confidence. Regulations spawn innovative escapes (regulatory dialectics) through loopholes in the regulations. Regulations can benefit financial institutions. Do Regulations Benefit or Harm Financial Institutions? Regulatory dialectics are not the most productive form of innovation. The time and energy spent on regulatory compliance activities are costly. Regulations can harm financial institutions. The Regulation of Commercial Banks Due to their importance in the financial system, commercial banks are typically the most regulated of all financial institutions. Responsibility for regulating . banks today is divided among three federal banking agencies – the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation – and the state banking commissions of the 50 states. The Federal Reserve System Supervises and .