Financial regulation and policy are areas that are frequently tackled in many international finance courses, but what is the importance of financial regulation? Is it an important part of global economics or should it be left to experts? Well, there are several different schools of thought when it comes to answering this question, but the main point is that it is an aspect of finance that can’t be left to its own devices. This course offers students with a solid understanding of the global financial system, particularly from a UK perspective, and introduces students to both the why and the importance of financial regulation, exploring the need and importance of financial regulation before proceeding to explore the importance and necessity of financial regulation itself. Help With Tax Debt is a way under financial regulation. In that, the government helps you when you can’ t afford to pay your tax.
There are many arguments both for and against the importance of financial regulation. Some say that without regulating the market effectively, consumers and businesses will have no protection from abusive lenders and predatory lending practices or even worse, from being fleeced by the very lenders that should be regulated in the first place! The importance of financial regulation is that it ensures that all market participants are acting in the consumer’s best interests, rather than those of some self-interest, such as the interests of banks or other financial institutions. Such regulation is said to ensure that these institutions and individuals are held to account and that they are kept afloat by appropriate regulation.
Another argument for the importance of financial regulation comes from the fact that, as compared to other economic policies, regulation of financial services is relatively low in scale and is therefore subject to less political scrutiny. Thus the importance of financial regulation can be seen not just from the point of view of consumers and business owners, but also from the point of view of governments that wish to take on an active role in the economic development of their country. Without a well-developed regulatory framework, there is little that the government can do to ensure that the economy responds as it should, or indeed should have, in terms of economic growth and social development.
As mentioned at the start of this piece, one of the most important arguments for the importance of financial regulation is that the smooth functioning of the global financial systems is essential to the economic development of all countries. Without the regulation that occurs through financial institutions, it is impossible to achieve the necessary international trade and the openness that go with it. Regulation of the financial systems helps to ensure that international capital flows are not affected by local restrictions and barriers, such as political turmoil and war. A well functioning financial system provides a level playing field for all business, giving them access to credit and the means of global expansion.
The importance of financial system regulation can also be seen from the perspective of national economic growth. Consider a scenario where the political stability of a country is dependent on the ability of its financial sector to successfully operate. The value of currency and its relative value against other currencies fluctuate accordingly. If the government of a country comes into a financial crisis, it has serious implications for the economy. A sudden and large scale adjustment of monetary policies can negatively affect the economic growth of a country. In addition, the need for comprehensive monetary policy decisions is necessary to avoid hyperinflation, deflation and interest rate hikes, damaging to competitiveness.
Finally, the importance of financial development is tied in with the issue of political stability. When the political situation of a country is in a state of ambiguity, there is a risk that economic policies are manipulated for the advantage of certain sectors, leaving the overall economic health of the nation at risk. The need for stable governments leads to a need for stable financial institutions that provide support to various economic sectors, in order for the country to enjoy a healthy economic growth.