4.2.4.4 Regulation of the Financial System (AQA A-Level Economics Teaching PowerPoint)

This AQA Teaching Powerpoint covers aspects of Regulation of the Financial System

Financial regulation is needed because the financial system is complex and interconnected, and a failure in one part of the system can have serious consequences for the entire economy. Here are some reasons why financial regulation is important:

• Preventing systemic risk: Financial regulation helps to reduce the risk of a major financial crisis by requiring financial institutions to maintain adequate capital and liquidity, and by limiting risky activities.
• Protecting consumers: Financial regulation protects consumers from fraud, predatory lending, and other harmful practices.
• Ensuring fair competition: Financial regulation promotes fair competition in the financial industry by preventing anticompetitive behavior and unfair pricing practices.
• Promoting financial stability: Financial regulation helps to prevent the kind of market instability that can lead to economic downturns and recessions.