ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Detailed explanation-1: -Successful financial regulation prevents market failure, promotes macroeconomic stability, protects investors, and mitigates the effects of financial failures on the real economy.
Detailed explanation-2: -to avoid misuse of banks-to reduce the risk of banks being used for criminal purposes, e.g. laundering the proceeds of crime.
Detailed explanation-3: -The financial markets impact growth by channeling saving to firms and improving the allocation of capital. Moreover, efficient financial markets and institutions tend to lower search and transactions costs in the economy.
Detailed explanation-4: -Regulation is also important because it promotes financial stability by limiting the ability of banks to engage in activities that could lead to a systemic crisis. In addition, bank regulation helps to ensure that banks can serve as reliable sources of credit for businesses and households.