1

Research question: In light of the financial crisis and the

collapse of large institutions, both public and private, what
are the implications for regulation? Compare the financial
regulatory system in Trinidad and Tobago with two (2) other
countries:

i. UK &
ii. US
 2
TABLE OF CONTENTS

Page

Introduction- Overview of the Financial Crisis ……………………………………………….

…3

Definition of the financial

sector………………………………………………………………… 4

The financial regulatory system in Trinidad and Tobago (T&T).……………………..………

5- 9

The financial regulatory system in The United Kingdom (UK)………………….…….……

10-14

The financial regulatory system in The United States……………………………….………

15-19

Implications for regulations……………………………………………………………….…

20-21

Similarities/ Differences between the financial regulatory systems…………………..

………... 22

Conclusion………………………………………………………………………………………
23

Bibliography…………………………………………………………………………………….
24
 3

Introduction

The Financial Crisis of 2008

Since the Great Depression of 1929, the world had not experienced a similar situation till the

financial crisis of 2008. The first alarming sign that the economy was in trouble occurred two

years earlier, back in 2006. In 2006 housing prices started to fall, which realtors felt

optimistic about initially. They thought the overheated housing market would return to a

more sustainable level. However, what they did not realize is the fact that there were too

many homeowners with questionable credit. This was attributable to that fact that banks had

allowed people to take out loans for 100% or more of the value of their new homes. More

signs of the financial crisis appeared in 2007. Banks panicked when they realized that they

had to absorb huge losses, and they stopped lending to each other in an attempt to prevent

other institutions from giving them worthless mortgages as collateral. As a result, interbank

borrowing costs, rose. As the situation began to spiral out of control, the Federal Reserve

began pumping liquidity into the banking system via the Term Auction Facility, but

unfortunately that measure was not adequate. This catastrophe occurred despite the desperate

attempts by the Federal Reserve and Treasury Department to prevent it and housing prices

dropped more than the price plunge during the Great Depression.
 4

Figure 1. 2008 Financial Crisis Costs

The Financial Sector

According to the OECD, “the financial sector is the set of institutions, instruments, and the regulatory

framework that permit transactions to be made by incurring and settling debts; that is, by extending

credit.” This sector of the economy is governed by financial regulators. “A financial regulator is an

institution that supervises and controls a financial system. Their objective is to guarantee fair and

efficient markets and financial stability,” (Orlov, 2018). This section of the economy is made up of

firms and institutions that provide financial services to commercial and retail customers. The sector

comprises many different industries including banks, investment companies, insurance companies, and

real estate firms. A good portion of its revenue is generated from loans and mortgages and thrives in a

low-interest-rate environment. The performance of this sector is extremely critical to any country

because in order for an economy to remain stable, it needs to have a healthy financial sector. This

sector advances loans for businesses so they can expand, grant mortgages to homeowners, and issue

insurance policies to protect people, companies, and their assets. It also helps build up savings for

retirement and employs millions of people. When rates are low, the economic conditions open up the

doors for more capital projects and investment. As a result, when this transpires, the financial sector

benefits, signifying that more economic growth is experienced.

 5
 Below is a simple model which depicts the way in which money and resources flow
throughout the economy as well as the connections between different sectors.

Figure 2. The Circular Flow of Income

⎯ The Central Bank of T&T

In Trinidad and Tobago, The Central Bank is the main regulatory body of financial

institutions. According to the T&T Stock Exchange Limited, The Central Bank Act of 1964

entrusts the Central Bank with a range of responsibilities including but not limited to the

following:

1. Issuing and redeeming currency

2. Developing and implementing monetary policy

3. Acting as banker and advisor to the Government

4. Acting as banker to the commercial banks

5. Issuing of securities on behalf of the Government

6. Managing the foreign exchange market and protecting the external value of the

currency
 6
7. Investing the country's external reserves and the Heritage and Stabilization Fund

(HSF)

8. Fostering and promoting financial stability

9. Conducting intelligence-gathering and research

In addition, the Central Bank is also very instrumental in the development of the Trinidad and

Tobago financial system and continues to adopt policies which foster economic growth and

development.

Other Regulatory Bodies That Govern The Financial Sector In

T&T

monopoly to a more competitive

Telecommunications Authority of environment.
Trinidad and Tobago
The Telecommunications Authority of

Trinidad and Tobago was established in One such initiative which was carried out

July 2004 by the enactment of the to eradicate this monopoly was the

welcoming of Digicel into the

Telecommunications Act 2001 ⎯
telecommunications market.
(Amended by 17 of 2004) as the

independent regulatory body responsible “A tidal wave has swept away the bridge

for the transformation of the since the start of the fierce battle between
the two main mobile operators in
telecommunications sector from a
Trinidad and Tobago. The market has
 7
been liberalized. Digicel has launched. is waiting in the wings to launch”
TSTT has re-branded. These two (Alleyne, 2006)
operators have locked horns and Laqtel

Prior to this, TSTT dominated the market for twenty-six years. Due to the lack of competition in the

market for so many years, TSTT was accused of setting artificially high prices through price fixing.

As a result, there was a dire need to break this monopoly so that consumers would get greater value for

their money. As a result, with the introduction of Digicel into the market, TSTT was forced to improve

its products and services, and continually drive prices lower

In addition. the Authority is not only responsible for the liberalisation of the telecommunications
sector, other responsibilities of the Telecommunications Authority include:
1. Regulating both telecommunications and telecommunications and broadcasting
broadcasting sectors services to all.
2. Managing spectrum and number resources,
3. Establishing equipment and service quality
standards
4. Setting guidelines to prevent anti-
competitive practices and
5. Encouraging investment in order to
facilitate the availability of affordable

Trinidad and Tobago Securities and Exchange Commission

This Commission was first established, by

the Securities Industry Act (SIA) in 1995

and continued under the Securities Act

2012 (SA, 2012) as a body corporate to

regulate the securities market in Trinidad

and Tobago.

Some of the Commission’s main functions, as outlined in Section 6 of the SA, 2012 are to:
 8
1. Advise the Minister of Finance on matters related to the securities industry.

2. Maintain surveillance over the securities market and ensure orderly, fair and equitable

dealings in securities.

3. Register, authorize or regulate, in accordance with the SA, 2012, self-regulatory

organisations, securities companies, brokers, dealers, traders, underwriters, issuers and

investment advisers and control and supervise with a view to proper standards of conduct,

and professionalism in the securities business.

4. Protect the integrity of the securities market against any abuses arising from the practice

of insider trading.

5. Create and promote such conditions in the securities as may seem to it necessary,

advisable or appropriate to ensure the orderly growth and development of the capital

market.

6. Educate and promote an understanding by the public of the securities industry and the

benefits, risks, and liabilities associated with investigating in securities.

7. Ensure compliance with the Proceeds of Crime Act, any other written law in relation to

the prevention of money laundering and combating the financing of terrorism or any other

written law that is administered or supervised by the Commission.

Trinidad and Tobago Stock Exchange Limited

The TTSE is the largest stock exchange in Exchange also cross-list their stocks on it.

the Caribbean, with 30 companies listed on The Stock Exchange is the nation's

the main board of the exchange. While centralized marketplace for buying and

several businesses from Barbados, Jamaica selling stocks or shares and other

and the Eastern Caribbean Securities securities. In addition to increasing the

 9
investment options available to

individuals, it also provides a mechanism

through which companies can raise capital

for expansion purposes by issuing stocks

and bonds.

 Significant changes to the financial regulatory system in Trinidad

and Tobago.
There was a need for Regulatory Reform on major financial markets in which pricing

restrictions have been eliminated, geographic limitations and barriers to entry have fallen in

most countries, and restrictions on the range of financial services that providers can offer are

disappearing. These complex conglomerate groups operating across national borders

increasingly challenge regulators across the world facing an uneasy trade-off between the

dictates of stability and competition. New forms of regulation and supervision are therefore

being developed, relying to a much greater degree on international co-operation and on the

effective internal governance of institutions. All companies that are engaged in the provision

of financial products and services are required to adopt the IFRS. The regulatory and

supervisory systems for the various segments of the financial sector would be upgraded to

provide for the integrated regulation of the sector. In order to give effect to the integrated

regulation and supervision of the financial sector, a single Regulatory Authority with the

necessary powers and authority should be established. As the financial reforms are gradually
 10
introduced, it may be necessary, in the interim, to establish a Regulatory Council as a first

step towards the establishment of the single Regulatory Authority.

 Penalties for breaching regulatory guidelines

EXTRACT
According to the Financial Institutions Act of Trinidad and Tobago,
“An Operator who fails to comply with an obligation
imposed under this Part or Regulations made under this Act
commits an offence and is liable on summary conviction to a fine
of five million dollars and where such offence is committed with
the consent or connivance of or is attributable to any neglect on
the part of any director or officer of the Operator, that person also
commits an offence and is liable on summary conviction to a fine
of five million dollars and to imprisonment for five years.”

THE FINANCIAL OBLIGATIONS REGULATIONS, 2010- EXTRACT

42. A financial institution or listed business which does not comply

penalties with these Regulations, commits an offence and is liable on summary
conviction or on conviction on indictment, to the penalty prescribed in
section 57 of the Act.

43. (1) Where a company commits an offence under these

Regulations, any officer, director or agent of the company
(a) who directed, authorized, assented to, or acquiesced in the
commission of the offence; or
(b) to whom any omission is attributable,
is a party to the offence and is liable on summary conviction or on
conviction on indictment, to the penalty prescribed in section 57 of the
Act whether or not the company has been prosecuted or convicted.
 11
Recently, a new regulatory regime was established in the UK. On 1 April 2013, the Financial

Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) officially came

into force. The two regulators replaced the Financial Services Authority under the Financial

Services Act which was passed in December 2012.

Since its election in 2010 the Coalition Government had been overhauling the UK’s financial

regulatory framework. The Financial Services Authority was disbanded and responsibility for

financial stability was passed to the Bank of England. Within the bank now sits the Financial

Policy Committee (FPC), responsible for horizon-scanning for systemic risks and the

Prudential Regulation Authority (PRA) responsible for the solvency and resolution of

systemically important institutions. The Financial Conduct Authority (FCA), is responsible

for ensuring consumer protection and markets regulation, as well as prudential supervision of

smaller firms.

 The Bank of England (BoE) / Central bank

The BoE has two core purposes, ensuring monetary and financial stability and the following

key roles in banking regulation:

1. Oversight of the interbank payment systems regime. By seeking to reduce risks that

could be posed to the UK financial systems and prioritising its activities according to

the risks posed by each system.

2. Role in the Special Resolution Regime, which gives the authorities a framework for

dealing with distressed banks.

3. Provider of liquidity and lender of last resort to the banking sector. This is not

prescribed in rules, it is a discretionary power.

 Financial Conduct Authority (FCA)

 12
The FCA regulates about 26,000 firms; in addition, the FCA also took over the FSA’s former

responsibility for the Financial Ombudsman Service, the Money Advice Service, and has

responsibility for the Financial Services Compensation Scheme.

Objectives:
The Financial Services Act 2012 states that the FCA has an overarching strategic objective to

“ensure that the relevant markets function well”, as well as three operational objectives:

1. Consumer protection: securing an appropriate degree of protection for consumers.

2. Integrity: protecting and enhancing the integrity of the UK financial system.

3. Competition: promoting effective competition in the interests of consumers in the

markets for: regulated financial services and services provided by a recognized

investment exchange.

 Prudential Regulation Authority

The Prudential Regulation Authority (PRA) is a part of the Bank of England and responsible

for the prudential regulation and supervision of all “systemically important firms” – those

firms that pose a risk to the financial system were they to fail. This covers all institutions that

accept deposits or insurance contracts – and so the PRA will oversee banks, building

societies, credit unions, insurers and major investment firms. It sets standards and supervises

financial institutions at the level of the individual firm.

Objectives:

The PRA makes an important contribution to the Bank of England’s core purpose of

protecting and enhancing the stability of the UK financial system through its two statutory

objectives:
 13
⎯ To promote the safety and soundness of systemically important firms.

⎯ To contribute to the securing of an appropriate degree of protection for

policyholders (specifically for insurers).

The PRA is also responsible for “promoting the safety and soundness of PRA regulated

persons”. This is to ensure that PRA authorised persons “carry on in a way which avoids

adverse effect on the stability of the UK financial system” and that, should a PRA authorised

person fail, the impact on the system as a whole is minimised. Policyholders are protected

both by the FCA (who is responsible for ensuring consumers are treated fairly) and the PRA.

The PRA’s focus is to ensure that “policyholders have an appropriate degree of continuity of

cover for the risks they are insured against”.

In general terms the PRA’s objectives require insurers to be resilient against failure and to be

able to avoid disrupting the financial services sector as a whole. Although insurers do not

threaten the stability of the financial system in the same way as banks, a failure does have the

potential to cause significant disruption. However, despite this threat, the PRA’s remit is clear

in that it is not there to prevent all failures. If an insurer were to fail, it is the PRA’s role to

make sure that disruption is kept to a minimum and that there is a degree of continuity of

cover for policyholders

 Key significant changes to the UK regulatory system post the

2008 crisis:
 14
✔ Savings protection

People who have savings have long been protected from losing their money if their bank goes

bust. But since the onset of the crisis, the level of protection has more than doubled.

✔ Vetting executives

The FSA has moved to scrutinise more thoroughly banks' appointments of chief executives

and board members in recent years.

The regulator has to approve anyone wanting to serve in "significant influence functions"

(SIF) at financial companies.

✔ It now uses formal panels to interview many would-be top executive

Once the FSA is replaced under the new regulatory system, the Financial Conduct Authority

will be involved in SIF interviews and will have the right to veto individuals.

• Penalties for breaching regulatory guidelines

Typical sanctions imposed against firms and individuals for violations:

Typically, fines are levied by the PRA and FCA against firms for violations. Discounts are

ordinarily applied where firms cooperate with the regulators and for early settlement. In the

2017, the FCA imposed fines of approximately £229 million, including a fine of £163 million

levied against Deutsche Bank AG for anti-money laundering controls failings during the

period between 1 January 2012 and 31 December 2015.

 The following table contains information about fines published during the calendar

year ending 2019 in the UK.

Firm or Date Amount Reasoning

individual fined
 15
Kevin Gorman 20/12/2 £45,000 This Final Notice refers to breaches of Article
019 19(1) of MAR related to failing to notify trading in
shares to their issuer and the FCA as a PDMR in
the issuer sector. We imposed a fine.
Professional 17/12/2 £70,000 This final notice refers to breaches of the Conduct
Personal Claims 019 of Authorized Persons Rules 2014 in relation to
Limited misleading consumers to claims in the claim
management companies sector. We imposed a
fine. 
Henderson 18/11/2 £1,867,90 This final notice refers to breaches of PRIN 3 and
Investment Funds 019 0 PRIN 6 related to the unfair treatment of customers
Limited in the Asset Management sector. We imposed a
fine.
 16

The United States financial system is a network that facilitates exchanges between lenders

and borrowers. The system, which includes banks and investment firms, is the base for all

economic activity in the nation. According to the Federal Reserve, financial regulation has

two main intended purposes:

1. To ensure the safety and soundness of the financial system.

2. To provide and enforce rules that aim to protect consumers.

Federal and state governments have a myriad of agencies in place that regulate and oversee

financial markets and companies. These agencies each have a specific range of duties and

responsibilities that enable them to act independently of each other while they work to

accomplish similar objectives.

 Federal Reserve Board

The Federal Reserve Board (FRB) is one of the most recognized of all the regulatory bodies.

As such, the "Fed" often gets blamed for economic downfalls or heralded for stimulating the

economy. It is responsible for influencing money, liquidity and overall credit conditions. Its

main tool for implementing monetary policy is its open market operations, which control the

purchase and sale of U.S. Treasury securities and federal agency securities. Purchases and

sales can change the quantity of reserves or influence the federal funds rate - the interest rate

at which depository institutions lend balances to other depository institutions overnight. The

Board also supervises and regulates the banking system to provide overall stability to the
 17
financial system. The Federal Open Market Committee (FOMC) determines the actions of the

Fed.

 Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) was created by the Glass-Steagall Act of

1933 to provide insurance on deposits to guarantee the safety of checking and savings

deposits at banks. Its mandate is to protect up to $250,000 per depositor. The catalyst for

creating the FDIC was the run on banks during the Great Depression of the 1920s.

 Office of the Comptroller of the Currency

One of the oldest federal agencies, the Office of the Comptroller of the Currency (OCC) was

established in 1863 by the National Currency Act. Its main purpose is to supervise, regulate

and provide charters to banks operating in the U.S. to ensure the soundness of the overall

banking system. This supervision enables banks to compete and provide efficient banking

and financial services.

 Office of Thrift Supervision

The Office of Thrift Supervision (OTS) was established in 1989 by the Department of

Treasury through the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

It is funded solely by the institutions it regulates. The OTS is similar to the OCC except that

it regulates federal savings associations, also known as thrifts or savings and loans.

 Commodity Futures Trading Commission

The Commodity Futures Trading Commission (CFTC) was created in 1974 as an independent

authority to regulate commodity futures and options markets and to provide for competitive
 18
and efficient market trading. It also seeks to protect participants from market manipulation,

investigates abusive trading practices and fraud, and maintains fluid processes for clearing.

The CFTC has evolved since 1974 and in 2000, the Commodity Futures Modernization Act

of 2000 was passed. This changed the landscape of the agency by creating a joint process

with the Securities and Exchange Commission (SEC) to regulate single-stock futures.

Financial Industry Regulatory Authority

The Financial Industry Regulatory Authority (FINRA) was created in 2007 from its

predecessor, the National Association of Securities Dealers (NASD). FINRA is considered a

self-regulatory organization (SRO) and was originally created as an outcome of the Securities

Exchange Act of 1934. FINRA oversees all firms that are in the securities business with the

public. It is also responsible for training financial services professionals, licensing and testing

agents, and overseeing the mediation and arbitration processes for disputes between

customers and brokers.

 State Bank Regulators

State bank regulators operate similarly to the OCC, but at the state level for state-chartered

banks. Their oversight works in conjunction with the Federal Reserve and the FDIC.

 State Insurance Regulators

State regulators monitor, review and oversee how the insurance industry conducts business in

their states. Their duties include protecting consumers, conducting criminal investigations

and enforcing legal actions. They also provide licensing and authority certificates, which

require applicants to submit details of their operations.

 State Securities Regulators

 19
These agencies augment FINRA and the SEC for matters associated with regulation in the

state's securities business. They provide registrations for investment advisors who are not

required to register with the SEC and enforce legal actions with those advisors.

 Securities and Exchange Commission

The SEC acts independently of the U.S. government and was established by the Securities

Exchange Act of 1934. One of the most comprehensive and powerful agencies, the SEC

enforces the federal securities laws and regulates the majority of the securities industry. Its

regulatory coverage includes the U.S. stock exchanges, options markets and options

exchanges as well as all other electronic exchanges and other electronic securities markets. It

also regulates investment advisors who are not covered by the state regulatory agencies.

 Key significant changes to the regulatory system in the

United States Financial sector.

✔ Robust Supervision and Regulation of Financial Firms

After the financial crisis of 2008 there were changes to promote more robust and consistent

regulatory standards for all financial institutions, with little gaps, loopholes, or opportunities

for arbitrage. There was the creation of a Financial Services Oversight Council, chaired by

Treasury, to help fill gaps in supervision, facilitate coordination of policy and resolution of

disputes, and identify emerging risks in firms and market activities. All large, interconnected

firms whose failure could threaten the stability of the system should be subject to

consolidated supervision by the Federal Reserve, regardless of whether they own an insured

depository institution.

✔ Establishment of Comprehensive Regulation of Financial Markets

 20
There was a proposal to strengthen the prudential regulation of all dealers in the Over The

Counter (OTC) derivative markets and to reduce systemic risk in these markets by requiring

all standardized OTC derivative transactions to be executed in regulated and transparent

venues and cleared through regulated central counterparties. Additionally, there was an

enhancement of the Federal Reserve’s authority over market infrastructure to reduce the

potential for contagion among financial firms and markets. There was also a proposal to

harmonize the statutory and regulatory regimes for futures and securities.

✔ Protect Consumers and Investors from Financial Abuse

There was a proposal to create a single regulatory agency, a Consumer Financial Protection

Agency (CFPA), with the authority and accountability to make sure that consumer protection

regulations are written fairly and enforced vigorously. The CFPA should reduce gaps in

federal supervision and enforcement; improve coordination with the states; set higher

standards for financial intermediaries; and promote consistent regulation of similar products.

Consumer protection is a critical foundation for our financial system. It gives the public

confidence that financial markets are fair and enables policy makers and regulators to

maintain stability in regulation. Stable regulation, in turn, promotes growth, efficiency, and

innovation over the long term.

 Penalties for breaching regulatory guidelines:

Participation by financial institutions.

Whoever knowingly violates section 5136A of the Revised Statutes of the United States,

section 9A of the Federal Reserve Act, or section 20 of the Federal Deposit Insurance Act

shall be fined under this title or imprisoned not more than one year, or both.
 21

Implications for Regulation

Government regulators are working across the world to reduce risks in the finance sector and

they are taking more control. These regulations affect the financial services industry in many

ways, but the specific impact depends on the nature of the regulation. Increased regulation

typically means a higher workload for people in financial services, because it takes time and

effort to adapt business practices that follow the new regulations correctly. While the

increased time and workload resulting from regulation can be detrimental to individual

financial or credit services companies in the short term, the financial services industry can

also reap many benefits from this in the long run.

One such regulation which was introduced in the United States is the Sarbanes-Oxley Act.

This was passed by Congress in 2002 in response to multiple financial scandals involving

large conglomerates namely, Enron and WorldCom. These regulations were much needed in

light of the unscrupulous behaviour being practiced by finance professionals. In essence

when such measures are implemented by these regulatory bodies it helps protect the overall

stability of financial services by protecting customers, taxpayers and the rest of the economy

from crisis.

 Implications for Regulation

 22

- Greater transparency - Costly

- Holds companies - Time consuming
accountable
- Increased workload
- Greater uniformity of
financial reports - Anti-value creation
for the business
- More protection for
customers and
investors
 23
Conclusively, government regulation can affect the financial industry in positive and negative

ways. Initially, the major downside is that regulation increases the workload for individuals

in the industry who ensure regulations are adhered to. For example, in the UK since public

companies are now required to publish strategic reports, it increases the time management

spends on publishing financials. Additionally, with the changes made to the format of the

Auditor’s report more time is also spent when creating this report. However, because of

these changes greater transparency is now provided for the users of financial statements. By

extension, another positive outcome is that some regulations like the Sarbanes-Oxley Act

help hold companies accountable for their actions and also places an increased emphasis on

internal controls.

Businesses depend on a healthy, well-regulated financial system to spur economic growth.

However, the past decade has been turbulent from the financial crisis to its legislative

response. While many of these reforms have improved the flexibility of our financial system,

a number of policy responses are negatively influencing companies and their customers.

Some key findings were that businesses respondents are affected by changes in the financial

services market. While the increased cost to facilitate compliance has now been passed on to

customers in the form of higher prices to access goods and services. Also, the variety of

services offered to customers were also decreased in an attempt to cut cost. Due to these

factors, a great percentage of persons believe that the regulations on the financial services

sector will not help their companies’ outlook over the next two to three years.
 24

 Similarities between the financial regulatory systems of T&T,

The UK, & The US.

 All three (3) systems equally acknowledges the greater need for transparency and

developed and enhanced their reporting standards and requirements to facilitate this.

 For example, there was a change to the format of the auditor’s report and there

was also the introduction of the strategic report for companies operating in the

UK.

 All three systems aim at fostering and promoting financial stability.

 All three systems have a vast number of regulatory boards that oversee financial markets

in order to maintain its stability.

 Differences between the financial regulatory systems of T&T,

The UK, & The US.

 The regulatory bodies and frameworks in the UK and the US are a bit more rigid and

complex when compared to Trinidad and Tobago’s. This is attributable to the fact that

the UK and the US has much more corporations to oversee and manage thus leading to a

much larger scope of regulations and laws.

 The UK has a 2-tier regulation system and they are more equipped for mitigation and

prevention of a financial crisis whereas that doesn’t exist in the case of Trinidad and the

United States.
 25

Conclusion
Financial regulation is a form of regulation or supervision of the financial services industry,

aiming to maintain the integrity of the financial system. Ever since popular financial

calamities like Enron (2001), WorldCom (2002) and the financial crisis of 2008;

Governments and other regulatory bodies across the world have placed a greater emphasis on

corporate governance and regulations which provide guidelines to facilitate the preparation

and presentation of financial statements globally. Through research it was noted that

regulatory bodies have an integral part to play in today’s society and every company should

have a robust regulatory system in place to maintain financial stability. These various

regulatory systems mentioned prior, generally aim for greater transparency by institutions and

they are important to ensure compliance, prevent fraud and to mitigate the possibility of

financial systems failing leading to financial crisis like the one in 2008. Lastly, it is important

to note that all countries have systems in place which often vary but they all have a common

goal or purpose in mind.

 26

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 27
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