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Which of the following best describe the purpose of financial services regulation


Financial regulation refers to rules and laws firms operating in the financial industry, such as banks, credit unions, insurance companies must follow.

What is the objective of the financial services regulation?

Financial regulation is necessary to ensure stability of the overall financial systems and prudent behaviour of financial institutions to minimise risks for consumers and financial institutions themselves. Financial regulation also aims at preventing money laundering and financing of terrorism.

Which of the following best describes the role of state regulators?

Its principal role is to serve as the lender of last resort and to stabilize the financial markets. One of the principal reasons for government regulation of financial firms is to protect the safety and soundness of the financial system.




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