Normalizing the financial sector is essential, especially since it is affected by catastrophes within the financial markets. While there are some reputable companies which have always had the best interest of their clients at heart, there are those that have abused the financial system. As a result, every business offering financial services ought to adhere to the financial framework that is implemented by both national and international agencies like the FINRA and the FSA. In this article, we will discuss some of the reasons why the financial regulators implement financial laws.
Understanding Finance Law
Financial Law comprises of rules, regulations, and practices that govern financial systems.
Reasons Why We Need Finance Law
Encouraging efficiency within the financial market is one of the reasons why financial laws are implemented. Efficiency has always been one of the main features that financial businesses use to succeed. Actually, it encourages healthy competition within the financial market.
Another reason why financial laws are enforced is to eradicate financial institutions that are legging behind in providing financial services. 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. When seeking financial services, clients should know everything about their finances. For example, if a client decides to invest in the stock market, he or she should be offered the right stock prices by the financial institutions so that they can evaluate if that is the right time to invest in stock market or not. Besides, a bank should display all the bank rates they charge their clients when they withdraw their money or all interest charged on 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. Not only does he teach private and international law, but he also teaches about finance, global governance, and 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.