Who Regulates National Banks?
The term "national bank" can refer to banks that are state-owned, particularly in developing countries. It also can relate to private banks that operate on a nationwide basis. In the United States, the term usually refers to a privately owned bank that operates within a specific regulatory structure.
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Regulatory Strategies
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Different countries have different regulatory strategies, each imposing certain requirements, restrictions and guidelines. Following the recent economic downturn, many countries have tightened their regulations for national banks. In the United States, banking is regulated at both federal and state levels.
U.S. Regulatory Systems
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The main bank regulatory systems in the United States are the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the National Credit Union Administration.
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Purpose of Bank Regulation
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The main objectives of national bank regulation are to maintain, or restore, confidence in the financial system, to protect consumers, to investigate cases where misconduct has occurred, to protect banking confidentiality, to ensure national banks are playing by the rules, to reduce the risk of banks being used for criminal purposes and to provide licenses for the many financial services being offered.
Individual Regulators
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In some regions, the financial regulatory body regulates all of the banks' financial products and services. However, some countries use specific authorities to regulate individual financial sectors, for example, mortgages, insurance and pensions.
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References
- Photo Credit bank roll image by John Sfondilias from Fotolia.com
