Financial Markets Regulation

Financial Markets Regulation

Global financial markets are a strong indicator of the trend of globalisation in the world economy . The integration of the mass markets around the world has stepped up the level of challenges and potential risks facing these economies . These risks could cause extensive fiscal damage at an unprecedented speed . Hence , in to combat these problems , financial regulation of markets has become indispensable in today 's modern world . Various international financial regulation agencies have been founded to ensure the normal functioning of the World economy . The chief objective of

financial regulation is to usher growth and development by stimulating economic activities . To promote fair economic activities , financial regulation needs to be consistent and has to adhere to established standards . However , financial regulations should not be arbitrary and should be capable of constantly evolving just like the markets they are designed to regulate

Proper financial regulation would help improve the accumulation of capital investment and to maintain effective resource allocation . Care has to be taken to ensure that these objectives are accomplished , while maintaining a secure financial environment . However , all financial organisations round the globe do not function based on the same model Hence , the same set of rules can not be imposed to effectively regulate all financial institutions . While applying these regulations , the sensitivities and specificities of the State need to be considered . This includes social , legislative , economic and historical factors that may hamper the effective enforcement of these financial regulators . Such factors are termed as Special Considerations

Some of the principal regulators of international financial markets are BIS , World Bank , Financial Stability Forum , IAIS , IMF , IASB , IFA , FSF and IOSCO . The BIS is the Bank for International settlements . The members of the BIS include various central banks around the world . The BIS headquarters is one of the oldest finance regulating bodies comprising of more than 140 members and 75 years of experience . It acts as an International stage to facilitate and encourage the analysis of financial policies among its member bodies . It performs almost the same role as that of the central banks , but does it on a global scale . It governs critical financial operations and transactions that take place in various countries . However , the BIS does not cater to corporate businesses and individuals . It is also strongly committed towards identifying and averting fraudulent schemes that are launched by anti-social elements . It mainly provides advice to central banks to help manage foreign reserves . The BIS has a banking regulation body called the Basel Committee to supervise the operation of banks . The BIS also conducts research on international finance markets to study foreign exchange and reserve management . It chalks out statistics based on this research and educates the international audience about the same through conferences and seminars . The Financial Stability Institute (FSI , an integral part of the BIS , specialises in providing recommendations and training to the BIS members , in to cope up with evolving global markets The IOSCO is one such organisation that deals with financial...