Microprudential regulation ensures that individual firms act fairly towards their customers and dont take excessive risks or break the law.

FINANCIAL MARKETS

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Microprudential regulation ensures that individual firms act fairly towards their customers and don’t take excessive risks or break the law.

A	Yes, I understand this from the notes
B	No, I don’t understand this from the notes
C	No, I don’t understand this, as I have not read the notes
D	None of the above

Explanation:

Detailed explanation-1: -Macroprudential policies are financial policies aimed at ensuring the stability of the financial system as a whole to prevent substantial disruptions in credit and other vital financial services necessary for stable economic growth.

Detailed explanation-2: -The ESRB carries out macro-prudential oversight at EU level. Its objective is to prevent and mitigate systemic financial stability risks in the light of macro-economic developments.

Detailed explanation-3: -Microprudential policy adjusts capital based on individual institutions’ risks, while macroprudential policy adjusts overall levels of capital based on the financial cycle and systemic relevance to guard against systemic risk buildup.

Detailed explanation-4: -Micro-prudential supervision is the responsibility of two regulatory authorities. The Prudential Regulation Authority (PRA) is in charge of prudential regulation of all deposit-taking institutions, insurers and investment banks.

There is 1 question to complete.

ECONOMICS (CBSE/UGC NET)

ECONOMICS

FINANCIAL MARKETS