Financial Regulation Quiz

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By jwblackwell



9 Questions

What is the main objective of financial regulation?

Which country implemented the first recorded ban on short selling?

What are the objectives of financial regulators?

What do exchange acts ensure?

What do financial regulators ensure listed companies comply with?

What do banking acts lay down rules for?

Which sectors of the finance industry are mainly regulated by different regulatory authorities?

What are some of the international organizations that set standards for financial regulation?

What did the adoption of the Basel II recommendations rely on?


Rules and regulations for financial institutions:

  • Financial regulation aims to maintain the stability and integrity of the financial system, and is handled by either a government or non-government organization.
  • The Dutch were the pioneers in financial regulation, with the first recorded ban on short selling enacted by the Dutch authorities as early as 1610.
  • The objectives of financial regulators are usually to ensure the smooth functioning of the financial system, prevent unwelcome developments, and protect investors.
  • There are various setups and combinations in place for the financial regulatory structure around the globe, with acts empowering organizations to monitor activities and enforce actions.
  • Exchange acts ensure that trading on the floor of exchanges is conducted in a proper manner, including the pricing process, execution, and settlement of trades.
  • Financial regulators ensure that listed companies and market participants comply with various regulations under the trading acts, including publishing regular financial reports and major shareholder notifications.
  • Asset management supervision or investment acts ensures the frictionless operation of those vehicles.
  • Banking acts lay down rules for banks to prevent unwelcome developments that might disrupt the smooth functioning of the banking system, ensuring a strong and efficient banking system.
  • Different regulatory authorities regulate each sector of the finance industry, mainly banking, securities, insurance, and pensions markets, but in some cases also commodities, futures, forwards, etc.
  • The structure of financial regulation has changed significantly in the past two decades, as the legal and geographic boundaries between markets in banking, securities, and insurance have become increasingly "blurred" and globalized.
  • International organizations such as the International Organization of Securities Commissions (IOSCO), the International Association of Insurance Supervisors, the Basel Committee on Banking Supervision, the Joint Forum, and the Financial Stability Board set standards through consensus-based decision-making processes.
  • European governments pushed dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008, which relied more than ever on the standardized assessments of credit risk marketed by two private US agencies- Moody's and S&P, thus using public policy and ultimately taxpayers’ money to strengthen an anti-competitive duopolistic industry.


Think you know the rules and regulations for financial institutions? Test your knowledge with our quiz! From the history of financial regulation to the different regulatory authorities that oversee the finance industry, this quiz covers it all. Challenge yourself and see how much you really know about financial regulation. Keywords: financial regulation, government, non-government, financial system, investors, trading, banking, securities, insurance, pensions, globalized, consensus-based decision-making, Basel II.

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