Normalizing the financial sector is essential, especially since it is affected by catastrophes within the financial markets. Although there are some reliable financial institutions out there, there are some institutions that are harming the financial sector. 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. Keep reading to find out the importance of implementing and following these financial laws.
Definition of Financial Laws
Financial Law comprises of rules, regulations, and practices that govern financial systems.
Importance of Having Financial Laws Implemented
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. In fact, efficiency encourages competition among the key players in the financial institutions.
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. If one bank under-performs, the whole economy is affected by the tidal waves causing the whole financial system to destabilize.
Financial information irregularity is present and customers who are in search of financial services need to be protected; financial laws are doing precisely this. It is the duty of all financial systems to provide their customers with the right information regarding their financial position. 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.
With that said and done, there are several finance regulators whose main aim is to regulate the financial and security industry. 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. Professor Chris Brummer talks about the intensity that a state used to enforce financial laws and practices determines how fiscal policies will be formulated.