Question

Global Bank Regulations Differ Your postings should be qualitative and provide substantive depth that advances the discussion. Each country has methods used to monitor and regulate their commercial banks. Provide examples of differences in regulations that exist between those of the U.S. and at least two other countries. Provide at least one citation other than your book that was used in composing your response.

Answer 1

Regulation of commercial banks in US:

In the US, bank is regulated at both federal & state level. Depending on the type of charter, the banking organization & its organizational structure may be subject to numerous federal & state banking regulations. The bank’s primary federal regulator could be federal deposit Insurance Corporation, Federal Reserve board or office of comptroller of currency. Within the Federal Reserve System are 12 districts that is centered around 12 regional federal reserve banks each of which carries out federal reserve board’s regulatory responsibilities in its respective district. Credit unions are subject to most bank regulations & are supervised by national credit union administration.

State regulation of state chartered banks & certain non bank affiliates of federally chartered banks apply in addition to federal regulation. For example, a California state bank which is not member of Federal Reserve System would be regulated by both California department of financial institutions & FDIC. Likewise a Nevada state bank which is a member of Federal Reserve System would be regulated by both Nevada division of financial institutions & Federal Reserve.

Regulation of banks in UK:

The regulation of banks in UK is undertaken by three main regulators namely bank of England (BOE), prudential regulation authority (PRA), a division of BOE & financial conduct authority (FCA).

The PRA & FCA are the lead bank regulators. The BOE is the resolution authority with primary responsibility for regulatory intervention & exercise of resolution in relation to banks which are failing or likely to fail.

For banks, PRA is the prudential regulator & FCA is the conduct regulator. The PRA & FCA together replaced the FSA. The BOE’s financial policy committee is responsible for macro prudential regulation of UK financial system & has powers to make recommendations to the regulators in certain circumstances.

Regulation of commercial banks in India:

RBI is the regulating authority that supervises & is responsible for managing the operations The RBI supervises and is responsible for managing the operation of the Indian financial system. In addition to issuing regulations and guidelines for banking operations, it also administers the provisions of the RBI Act, the BR Act and FEMA. It has wide discretionary powers and is authorized to inspect and investigate the affairs of banks and to impose penalties in the event of non-compliance.