The roles played by financial institutions in a country are extremely crucial. Due to the fluid characteristics that exist in the industry relevant agencies must step to provide operational guidelines.
Existence of unethical and unprofessional activities in one portion of the market can spell terrible impact throughout the industry. This as well results if a bank gets reckless when lending money.
People who patronize these institutions are entitled to protection from harmful effects necessitated by indiscipline in the banking industry. Firms that have a monopoly in the market must be checked to avoid abuse.
When a financial entity enjoys massive market share the tendency to unjustly drive the competing firms out of business is quite high. By so doing they also prey on helpless clients by overcharging them for the services offered.
Staff in the banks also capitalizes on the privileged information they have access to trade within the banks illegally. Supervising agencies in the industry work with enforce strict compliance to the confidentiality clause existing between the bankers and its clients. Read more about finance at http://money.cnn.com/2017/11/14/pf/financial-rules/index.html.
The bank is expected to engage in prudential lending practices to enhance its solvency. Clients' money in the financial institution likewise must be safeguarded.
To let the financial market run even for a day without stringent supervision is a costly blunder. Company operating in other sectors can be adversely affected by ripples in the banking sectors.
Wrong investments are often undertaken by the banks in total disregard as to the viability of the ventures thereby plunging themselves in a financial dilemma. Some tactics that financial players employ are fraudulent that places their clients in precarious states.
Historically it has been seen that catastrophes are a rarity in the financial sector. But when they happen the consequences are dire. The capitalization of the financial institution must be ample to shield it from the consequences of risks in the industry.
On their part the regulators like Chris brummer must employ an approach that is indicative of their faith and utmost trust in the financial industry. The regulators should aspire to instill a strong sense of moral and ethical responsibility on the bankers.
At all times supervisory agencies should clarify their approach to the stakeholders in the banking industry. The consequences of disregard of the rules should also be clear.
When overseeing adherence of the set rules the regulators like Chris brummer will carefully consider each challenge on per case basis. In the event that, an aggrieved party is not content with a decision of the regulators, he should be permitted to seek redress from an independent unit.