Question

In almost all industries, regulation is put in place to protect consumers. The case for the regulation of financial services and markets is no different, and in fact may be even stronger as no tangible product is actually purchased . Discuss this statement?

(maximum of 200 words).

Answer 1

financial markets are often regulated in order to protect the interest of various share holders and other stakeholders because the financial markets are operating into those products which are non tangible in nature like securities and these securities are to be monitored through high efficiency by various agencies as to protect the interest of the investor so that can be seen that in the past the financial investors has been exposed to a whole lot of risk which has been regularly committed by these companies.

Financial companies are often known for manipulating their books of accounts and financial manager is known for reporting a higher amount of profit through window dressing so there need to be a proper accountability fixed and these accountability are fixed at the regulatory exchange mechanism and entities so they will be trying to fix the responsibility of the company by proper disclosure and they will be trying to protect the interest of the stakeholders because the stakeholders are providing the money into the economy and their interest are needed to be protected by regulatory authorities.