International Banking Assignment Example | Topics and Well Written Essays - 4500 words

International Banking - Assignment ExampleBank linguistic rule in unifieds detailed regulations and guiding principles overriding the operations, activities and acquisitions of the banking organisations.1 The regulation of the banking business activities has seen a number of policies under implementation. This section aims at analysing the different objectives of the regulation in regards to the deposits and investment related business. Further, the disadvantages in the regulation of the businesses due to the behaviours they get ahead in the regulated entities of their customers analysed critically. 1.2 Banking Regulation Policy Highlights Financial regulations role in influencing the growth of banking business principles has become a key polity issue. The regulation of corporate governance in the monetary sector has initially been regarded as a special area with standards, and rules to achieve the objectives of financial regulation involving the safety and soundness of the finan cial system and consumer, as well as investor protection.2 With banking regulation, the traditional principle-agent model used to analyse the relationship between shareholders, directors and the managerial team has given way to broader policy concerns aimed at maintaining financial stability, while ensuring that banks operate in a way that promotes broader financial growth as well as enhancing investor worth.3 The main reason why banking regulation is of much essence is due to systemic risk of infections.4 These are risks whereby, economic problems at one or more banks spill over to a extensive number of other banks or financial systems as a whole. Regulation whether created at initial stages or after new models are fully operational, ought to succeed two principles, which are proportionality and effectiveness. Poorly designed or timed regulation can obstruct responsible providers from entering and competing profitably on a level playing field. Thus, a well equaled approach incor porates recognizing the tradeoffs between protecting customers and fostering financial access.5 The laws pertaining to banking regulation appear complex and confusing, but in the corporeal sense, with understanding of the objectives, it brings out a clear understanding of the intended application and projected achievements. 1.3 Main objectives of bank regulation Prudential involves reducing the level of risk exposure to the bank creditors considerably. Therefore, the regulation aims at protecting the depositors. The concept of prudence is integral to bank regulation and supervision as it connotes the notion that, regulation requires banking activities be undertaken with reasonable care.6 Systemic risk reduction This aims at reducing the peril of distraction resulting from unpleasant trading circumstances for banks, that in turn cause legion(predicate) or prime bank failures. This can also be referred to as ensuring monetary stability. Banks play a pivotal role in controlling the record book of money circulating in the economy of any given state. This in turn,