Reasons Why Financial Laws Should Be Implemented and Followed
Financial businesses are affected by market tragedies, and that is why financial regulators seek to stabilize this sector. Even though there are good financial businesses that are following economic laws, there are some that disrespect the financial practices and regulations. In this regard, every business out there offering financial services is required to stick to the financial laws that are laid out by national and international financial regulators like the FINRA and the FSA. In this article, we will discuss some of the reasons why the financial regulators implement financial laws.
Definition of Financial Laws
Finance law is a framework that lays out all the rules and regulation governing the financial market.
Reasons Why We Need Finance Law
Financial Laws are meant to encourage efficiency in the financial sector. For financial institutions to run smoothly, they need to have effective financial laws and regulations. Actually, it encourages healthy competition within the financial market.
Eliminating financial companies that are not providing their clients with valuable financial services is the other reason why financial laws are enforced in the financial system. It is important to note that if one financial institution fails, the global financial market is affected by the market calamities and as a result the entire financial market is destabilized.
Financial laws are enforced to protect the people who are seeking financial services against financial information irregularity. It is the duty of all financial systems to provide their customers with the right information regarding their financial position. For instance, if a customer wants to buy securities, it is only right that financial institutions provide them with the correct stock prices so that they know the risk they are exposed to. In addition to that, people seeking financial services should be advised on the bank rates and interest rates they can incur should they decide to withdraw their money or apply for loans.
In this regard, there are so many finance law researchers who have dedicated their time to research on financial needs and business operations. And Chris Brummer is one of those researchers. He lectures about the private and international law, finance and global governance as well as international trade. Professor Chris Brummer seeks to educate people on the importance of financial laws, how they are formed and how they impact the integrity, safety and soundness of the global financial industry. As a matter of fact, Chris brummer says that each of the primary strands of international financial law- whether it is trade, finance or international monetary law- often impact one another. Brummer further explains how a country enforces financial regulation impacts how monetary policy is developed.