Answer to Question #309257 in Macroeconomics for Madhuvan

Question

Discuss the goals of regulatory frameworks with regards to reasons governments manage regulate-es and use different regulators to policy the financial markets.

Answer 1

The goals of regulatory frameworks as listed governments and public sector bodies include:

Consumer protection against fraud, theft, discrimination and manipulation by applying the principle of suitability.

Investor protection against fraud, theft, discrimination and manipulation by applying the principle of suitability.

Financial stability through preventive and corrective measures that mitigate system risk.

Market efficiency and correcting errors of market failure to ensure participants have confidence in the markets' integrity.

Fairness by ensuring losses or failures in financial markets do not result in assumption of liability by taxpayers.

Prevention of financial crime through financial policies criminal and terrorist activity.