Regulation of Banking and Financial Services Essay

Regulation of Banking and Financial Services Essay

Length: 1221 words (3.5 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

Regulation of Banking and Financial Services
The Failure Process Imposed Upon Financial Institutions
The concept of systemic risk sprung to the foreground of the public’s consciousness during the financial crisis of 2007-8 as the Too Big To Fail (TBTF) banks were bailed out by the various US Federal Government agencies e.g., US Treasury via the Troubled Asset Relief Program (TARP) and the US Federal Reserve via Quantitative Easing (QE). However, as it turns out, the concept of systemic risk is not so easy to define in legal terms—as illustrated by the difficulty in nailing down the definition by US Congress via the Dodd-Frank legislation or by the US Treasury and the Federal Deposit Insurance Corporation (FDIC) via regulation (Horton, 2012). One thing is certain—the public has no stomach for any further bailouts, thus, the era of TBTF banks and non-bank financial companies has ended.
The FDIC, under new regulatory powers granted by Dodd-Frank, will resolve systemically important bank and non-bank financial institution failures i.e., bank and non-bank financial institutions that become insolvent (Horton, 2012). This process is similar to the way that the FDIC utilizes its traditional regulatory powers to resolve non-systemically important bank failures. However, non-systemically important non-bank financial institutions continue to be able to utilize bankruptcy as an option to resolve insolvency (Smith, 2011). While the FDIC has the regulatory power to resolve systemically important bank and non-bank financial institution failures it [the FDIC] will not be able to utilize them until the next financial crisis, which means the FDIC’s primary role will be to resolve non-systemically important bank failures (Guynn, 2012).
The two ...

... middle of paper ...

...solidation in the U.S. banking industry since Riegle-Neal. Journal of Business & Economics Research, 9(9), 71–78.
Hendrickson, J. M. (2010). The interstate banking debate: A historical perspective. Academy of Banking Studies Journal, 9(1/2), 95–130.
Horton, B. J. (2012). When does a non-bank financial company pose a “systemic risk”? A proposal for clarifying Dodd-Frank. Journal of Corporation Law, 37(4), 815–848.
Morris, C. S. (2011). What should banks be allowed to do? Economic Review - Federal Reserve Bank of Kansas City, 55–80.
Rose, P. S., & Hudgins, S. C. (2013). Bank Management & Financial Services (9th ed.). New York: The McGraw-Hill Companies, Inc.
Smith, R. C. (2011). The dilemma of bailouts. The Independent Review, 16(1), 15–26.
Tasto, M. T., & Randolph, G. M. (2011). Proposed Solutions to the FDIC Deposit Insurance Fund. Review of Business, 32(1), 120–124.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

A Research Topic On Competition Essay

- Historical Discussion My research topic of competition in UK banking is certainly not a new area, it has long been debated and is regularly mentioned in popular news articles. The competitiveness of banking sectors is often compared on an international scale however my research is much more focused on the UK singly and therefore my commentary will focus on the past 60 years of banking in the UK.   According to HM Treasury (2015), “in 1960 the UK retail banking market was dominated by the 16 London and Scottish clearing banks and a building society sector made up of more than 700 societies”....   [tags: Bank, Financial services, Banking, Bank regulation]

Strong Essays
1575 words (4.5 pages)

Financial Regulation And The Financial System Essay

- Financial regulation is a form of regulation or supervision of the financial services industry, aiming to maintain the integrity of the financial system. Deregulation was experienced mainly in the worlds of banking and building societies, also affected the structure of banking sectors. To some degree, self-regulation caused a lot of adverse effects on consumers, it aroused a hot topic for people on consumer protection. Split capital investment trusts are investment trusts that companies raise funds to invest in other companies....   [tags: Bank, Financial services, Economics, Insurance]

Strong Essays
737 words (2.1 pages)

Indian Financial Sector: Focus on Indian Banking Environment Essay

- Introduction - Financial sector overview Indian Financial Sector is a well diversified arena experiencing high growth and development. The financial sector of India is comprised of commercial banks, insurance companies, non-banking cooperations, pension and mutual fund houses and lot more other financial institutions serving the Indian Economy. However, the financial sector is a major ly dominated by the Bankin Sector where the commercial banks comprise of 60 percent of total assets held by the financial system followed by Insurance Sector....   [tags: banks, companies, regulation, stability]

Strong Essays
1126 words (3.2 pages)

China: International Private Banking Institutions Essay

- 1. Introduction In China, HNWIs (High Net Wealth Individuals) who has more than $1 million for investable assets are fast growing. It provides the huge opportunity for the private banking industry. Private banking could be defined in various ways. Basically, private banking means managing all aspects of a customer’s financial life. However, especially in Asia market, it is not only just financial management, also including all aspects of social life and different stages of the life care. Figure 1....   [tags: commercial banks, banking business]

Strong Essays
2265 words (6.5 pages)

Thailand Financial Institutions Essays

- 1. Introduction Thailand is an emerging Southeast Asian financial market, comprising an increasingly perfecting network of markets and institutions, which provide a relatively wide range of financial products and services towards domestic and international investors. Thailand financial system, since established in 1940 [1], has experienced the cautious and pragmatic management period in 1960-1970s, the financial liberalization period in late 1980s and early 1990s [2] and the restructuring period after1997 Asia Financial Crisis [3]....   [tags: banking system, financial system]

Strong Essays
1407 words (4 pages)

Banking as a Positively Pragmatic Aspect in the National and Global Economy

- Debating the topic of the size of banks is much like debating the topic of the size of the government; should a one industry play such an imperative role in the economy. Although many argue that it is unrealistic to expect any industry of this size to not take advantage of their role, and—like the government, the concentration of power has a history of negative effect on the economy, it must be remembered that banking is a competitive industry that differs from the government in a multitude of ways....   [tags: finance, global banking]

Strong Essays
1184 words (3.4 pages)

The Key Role Of The Banking System For The Money Laundering Essay

- In the majority of developing countries, banking is the most important part of the financial system, facilitating domestic and international payments, functioning as the intermediary for depositors and borrowers, and providing financially related services. For this reason, the banking system is considered the main target of the majority of laundering operations. The key role of the banking system for the money laundering is undoubtful, given that banks provide services functioning as vehicle for the introduction of illicit money into the financial system....   [tags: Bank, Finance, Financial services]

Strong Essays
1483 words (4.2 pages)

Essay on Customer Service And Customer Satisfaction

- Customer services and customer satisfaction are the prime objective of any service organization. Information and communication technology has furnished go-up to new innovations in the product designing and their delivery in the banking and finance industries. The transformation has been very productive for banks bringing in an increase in productivity and organizational efficiency to be more competitive. Banks have no alternative but to employ wireless solutions in device-independent and network-agnostic ways in responding to the customers demanding ‘anytime and anywhere’ access to their money and financial information....   [tags: Bank, Online banking, Financial services, Banking]

Strong Essays
1239 words (3.5 pages)

Financial Regulation in the UK and Ireland Essay

- Financial Regulation in the UK and Ireland There has been considerable changes in the regulation of financial markets in the UK and other countries. Why is this. Financial markets tend to be more highly regulated than other markets. Explain why. In May 1997, the British Chancellor of the Exchequer made the decision to move the responsibility of supervision of financial institutions into the hands of a new regulatory authority, the Financial Services Authority (FSA). This new authority replaced the Securities and Investments Board and took over responsibility for the supervision of banks, listed money market institutions and clearing houses from the Bank of England....   [tags: Finance Business Essays United Kingdom]

Strong Essays
2163 words (6.2 pages)

Essay on Bank Accounting Information System And Electronic Banking

- Bank Accounting Information System And Electronic Banking Introduction      Information technology has had as much impact on our society as the industrial revolution. In the information age, companies are finding that success or failure is increasingly dependent on their management and use of information. Therefore, companies need a good information system that enabled an efficient and effective use of information to give them more competitive advantage (Moscove, Simkin, & Bagranoff, 1999). An information system is a set of interrelated subsystems that work together to collect, process, store, transform, and distribute information for planning, decisions making, and control....   [tags: Finance Bank Banks Banking Essays]

Strong Essays
4502 words (12.9 pages)