Reasons Why Financial Laws Should Be Implemented and Followed
Due to the market calamities facing businesses that are in the financial institutions, there is need to normalize the financial system. Even though there are good financial businesses that are following economic laws, there are some that disrespect the financial practices and regulations. In this regard, every business out there offering financial services is required to stick to the financial laws that are laid out by national and international financial regulators like the FINRA and the FSA. Keep reading to find out the importance of implementing and following these financial laws.
Understanding Finance Law
Financial Law comprises of rules, regulations, and practices that govern financial systems.
Reasons Why We Need Finance Law
Encouraging efficiency within the financial market is one of the reasons why financial laws are implemented. Effectiveness has been one of the key qualities that financial systems embrace for them to be successful. Actually, it encourages healthy competition within the financial market.
The other reason why financial regulators encourage the implementation of financial laws is that these laws play an important role in eradicating financial businesses that are not offering quality financial services. If one bank under-performs, the whole economy is affected by the tidal waves causing the whole financial system to destabilize.
Financial laws are enforced to protect the people who are seeking financial services against financial information irregularity. When seeking financial services, clients should know everything about their finances. For example, if a client decides to invest in the stock market, he or she should be offered the right stock prices by the financial institutions so that they can evaluate if that is the right time to invest in stock market or not. In addition to that, people seeking financial services should be advised on the bank rates and interest rates they can incur should they decide to withdraw their money or apply for loans.
In this regard, there are so many finance law researchers who have dedicated their time to research on financial needs and business operations. Chris Brummer is one of the professors who has dedicated his time in the financial field. Private and international law, finance, global governance and international trade are some of the areas that Chris Brummer lectures on. He aims at enlightening the public about how financial laws are developed and how it affects the integrity and safety of the global financial system. In fact, the professor views all branches of internal financial law like the trade, finance or international monetary law as equal since one branch cannot work without the other branch. Brummer further explains how a country enforces financial regulation impacts how monetary policy is developed.