Importance of Finance Law
Normalizing the financial sector is essential, especially since it is affected by catastrophes within the financial markets. Even though there are good financial businesses that are following economic laws, there are some that disrespect the financial practices and regulations. As a result, every business offering financial services ought to adhere to the financial framework that is implemented by both national and international agencies like the FINRA and the FSA. In this article, we will discuss some of the reasons why the financial regulators implement financial laws.
Understanding Finance Law
Financial Law comprises of rules, regulations, and practices that govern financial systems.
Benefits of Implementing Financial Laws
Financial Laws are meant to encourage efficiency in the financial sector. 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.
Another reason why financial laws are enforced is to eradicate financial institutions that are legging behind in providing financial services. It is important to note that if one financial institution fails, the global financial market is affected by the market calamities and as a result the entire financial market is destabilized.
Not all financial institutions are created equally, and that is why bank and finance laws are enforced to protect consumers who are engaging the services of these institutions. It is the duty of all financial systems to provide their customers with the right information regarding their financial position. For example, if you want to purchase stocks, your bank should give you the right stock rates so that you can gauge whether investing in stocks is the right decision to make or not. Apart from that, they need to know about bank charges and interest on loans as well as their withdrawal limits.
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. Not only does he teach private and international law, but he also teaches about finance, global governance, and international trade. Professor Chris Brummer seeks to educate people on the importance of financial laws, how they are formed and how they impact the integrity, safety and soundness of the global financial industry. 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.