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Regulation of financial services (principal aims (GRIP) (give confidence…
Regulation of financial services
principal aims (GRIP)
give confidence in the system
reduce financial crime
inefficiencies in the market corrected
protect consumers
costs
direct
arise from administering the regulation
indirect
arise from changes in behaviour of consumers and regulated firms
Why greater regulation than most other markets
importance of confidence in the financial system
damage that would be done by a systemic financial collapse
approaches
prescriptive
freedom of action
rules on publicity so that third parties are fully informed about providers of financial services
outcome-based
regimes
unregulated markets
voluntary codes of conduct
self-regulation
regulation is economic good that consumers of financial services are willing to pay for and which will benefit all participants
Threat by government to impose statutory regulation if system is not implemented.
statutory regulation