Should the Government Regulate Banking Industry?

Abstract

The idea of government regulating the banking industry tends to serve as the debating point for quite some time. This paper intends to shed light on the perspectives attached to the whole idea of whether the government should or it should not take steps to regulate the banking industry.

Table of Contents

Abstracti

Introduction1

Discussion1

Self Regulation2

Ethics and Morality3

Government Intrusion4

Conclusion4

References5

Should the Government Regulate Banking Industry?

Introduction

The idea of government regulating the banking industry stretches itself to the concept of government framing certain laws, requirements or guidelines which the banks needs to follow. However, this is not as simple as it might seem. There are various factors, which need to, be addressed before jumping onto any conclusion. Experts tend to be divided on the issue of whether the government should regulate the banking industry or act opposite to it. By regulating, the banking industry government will be able to impose a much comprehensive control on the banks. This will also ensure that a certain standard will be set which all the banks need to follow. Since Banking and the regulation of the banking tends to considered significant for the growth of the country along with its financial system.

In the continuous evolving, world, the importance of banking regulations have increased and thus changing or regulating it can have an effect on the entire system on which the economy of any country tends to rest (Andreas, 2009). Therefore, in the context of this paper we intend to measure whether the government should regulate the banking industries or not. In the course of this paper, the objectives will be achieved by analyzing various perspectives.

Discussion

Any industry which intends to thrive needs to serve the people and to do so it is essential that it operates under certain laws and regulations. In my opinion, it is important that the government should regulate the banking industry in order to construct transparency within the system. It is important for the government to get involved in the banking sector to ensure that the uniform policies are being implemented for each and every one. However, many experts tend to hold the view that it is not the job of the government to get involved in something which can be controlled by the government. Thus, the need to look upon on the fact that whether we are capable of regulating or not.

Self Regulation

The idea of self regulation can only be processed if there is an authority that can look after the process. Every business tends to base itself on the principal of profit maximization thus if we tend to indulge in self Regulation than it would become too difficult to manage the overall transparency of the system. Every other bank would focus on profit maximization and thus check and balance would be removed out of the system. This would give banks the authority to frame laws on their consent without realizing its effects on society. Self Regulation can only succeed if there are certain laws, which need to, be ...