Bank Essay
1. What are the pros and cons of banking regulations stipulated by the central bank? Comment on the statement that regulations imposed on banks should be based on a strategic regulatory framework so as to be disclosed, transparent, equitable and predictable.
-Pros and cons of banking regulations stipulated by the central bank:
Pros: Central bank is one of the organizations which is in charge of making and maintaining bank regulation. Regulation helps to protect the public against loss through some of ways. First, gathering and evaluating information needed to assess the true condition of banks and other financial firms. Secondly, it requires the cameras and guards to reduce risk of loss due to theft. Periodic examination and audits is also help to reduce losses. Moreover, Government agencies stand ready to loan funds to financial firms faced with unexpected shortfalls of spendable reserves so the public savings are protected.
In addition, Regulation assist the control of money supply, control the volume of money created by banks and competing financial firms appear to be closely correlated with economic conditions in order to achieve a nation’s broad economic goals such as high employment and low inflation.
Another advantage is the preventing discrimination in granting credit or in other word, ensuring equal opportunity and fairness in the public’s access to credit and other financial services. It also help to provide the government with credit, tax revenues and other services, assist the conduct of monetary policy. Besides, public confidence’s promotion in the financial system which then lead to saving flow smoothly into productive investment and payments for goods and services are made speedily and efficiently is considered a pro of regulation as well. Moreover, through regulation, government can also help sector of the economy that have special credit need such as housing, small business and agriculture. Finally, It ensures that banks will be treated fairly
-Pros and cons of banking regulations stipulated by the central bank:
Pros: Central bank is one of the organizations which is in charge of making and maintaining bank regulation. Regulation helps to protect the public against loss through some of ways. First, gathering and evaluating information needed to assess the true condition of banks and other financial firms. Secondly, it requires the cameras and guards to reduce risk of loss due to theft. Periodic examination and audits is also help to reduce losses. Moreover, Government agencies stand ready to loan funds to financial firms faced with unexpected shortfalls of spendable reserves so the public savings are protected.
In addition, Regulation assist the control of money supply, control the volume of money created by banks and competing financial firms appear to be closely correlated with economic conditions in order to achieve a nation’s broad economic goals such as high employment and low inflation.
Another advantage is the preventing discrimination in granting credit or in other word, ensuring equal opportunity and fairness in the public’s access to credit and other financial services. It also help to provide the government with credit, tax revenues and other services, assist the conduct of monetary policy. Besides, public confidence’s promotion in the financial system which then lead to saving flow smoothly into productive investment and payments for goods and services are made speedily and efficiently is considered a pro of regulation as well. Moreover, through regulation, government can also help sector of the economy that have special credit need such as housing, small business and agriculture. Finally, It ensures that banks will be treated fairly