Financial regulation is supervision of financial institutions to certain rules and guidelines.
The aim is to keep the financial system honest and legal. Regulation may be done by either a government or non-government organization. Also, financial regulation has increased the variety of financial products available.
The objectives of financial regulators are usually:
- market confidence – to keep confidence in the financial system
- financial stability
- consumer protection – getting the right protection for consumers.
- Clement, Piet; James, Harold; Van der Wee, Herman (eds) 2014. Financial innovation, regulation and crises in history. Routledge. ISBN 9781848935044)
- Selling securities that are not currently owned (usually borrowed), and then repurchasing them ("covering") as prices fall.
- UK FSA statutory objectives