Question

One of the reasons why bank regulations need to be constantly revised to be effective is,

a.	Regulations tend to be poorly written with unintended consequences.
b.	Regulations are not strictly enforced.
c.	The efficacy of financial regulations decays over time as ways around them are discovered by the institutions being regulated.
d.	Regulators themselves can often be incompetent.

The goal of regulating bank operations is to reduce risk to as close to zero as possible.

True

False

Answer 1

1) C) The efficacy of financial regulations decays over time as ways around them are discovered by the institution being regulated.

explanation - Regulations are done in order to monitor the operations of bank, but these institutions find loopholes to get rid of it. Therefore the regulations needs to revised regularly.

2) True

explanation- Yes, the primary goal of bank is to reduce risk to which depositors are exposed.