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Similarities and differences among the objectives reflect the intrinsic characteristics of the banking, insurance and securities sectors. ...
Objectives of Banking, Securities and Insurance Regulations
Each sector, banking, securities and insurance, sets out their key objectives for supervision and regulations. ...
Banking regulations protect depositors and other creditors from misbehavior from banks in the financial system. Regulations play a role in preventing fraudulent and criminal use of the banking system. ...
Banking regulations place greater emphasis on systemic stability and consider customer protection as a by-product of stability and insurance regulations emphasizes policyholder protection. ... If these judgments are inaccurate or fail to recognize impaired assets, serious banking problems will arise. ... Further, large exposure to a single borrower representing a credit risk concentration is a common cause of banking problems. ...
The dominant risk in banking sector is credit risk while the dominating risk in insurance sector is whether its calculations of the necessary technical provisions prove adequate (operational risk). ... Further as the market becomes more concentrated, great number of supervisors from different sectors -- banking, securities and insurance may point to the danger of ‘abuse of power’ through interlocking directorship, mutual forbearance and concentration of power.
Approximate Word count = 2213
Approximate Pages = 8.9
(250 words per page double spaced)
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