Advantages of Financial and Securities Regulation
In a nutshell, financial and securities regulation are basically laws that help to govern various banks, insurance firms as well as government investment firms. There are a number of reasons why financial and securities regulation is important. The various benefits associated with financial and securities regulation are briefly highlighted below.
Dealing with fraud is easy when you have financial and securities regulation since there are laws in place to deal with such things and that is why it is very important. It is easy for fraud to take place when there is no law that governs issues pertaining to finances as well as securities. With laws in place, it becomes easy to safeguard customers from things like unethical products that could rip them off and cause them to experience losses.
Excessive loss is something that can be prevented as well when their is financial and securities regulation. Overseeing various regulations is important since it will ensure that companies will not end up with losses. The laws are also very important since they ensure that the government will not be caught off guard in case there are various incidents that may occur.
Having laws in place is also very important since it ensures that monopolies will not have an opportunity to abuse their power. Dealing with monopolies can be challenging since they can easily set unrealistic prices and even bring to the market products that are not ideal. Regulations are therefore important to ensure that exploitation by the public is something that is prevented.
It is important for regulations to exist so that things like asset bubbles do not arise in any economy since they can have harmful effects to any given country. Prices of stock, and various assets can easily go up when various speculators from various industries increase the prices of such items. With the increase of such prices, an explosion of the bubbles can result and this can end up causing a crisis at the end of the day and in the worst case even end up causing a recession.
With the help of government protection, it is very easy for various critical industries to get started since regulation helps to give them an equal fighting chance. A little help from the government is important since it ensures that companies that may have had a rough time starting are able to get help so that they are able to get started. In addition to protecting such industries, with the right rules, it is easy for companies to increase things like innovation, consumer choice as well as healthy competition.