Regulation of financial institutions seeks to protect the small saver because he or she may lack the
financial expertise and access to quality information needed to correctly judge the true condition of a
Loss of public confidence in the financial system would slow the growth of the economy.
The creation of money is closely associated with inflation.
The regulation of money creation has become a key objective of government activity in the financial
Regulation is often justified as the most direct way to aid so-called "disadvantaged" sectors of the
economy, such as new home buyers, farmers and small businesses.
Governments frequently regulate financial institutions to assure that financial services needed by
governments will continue to be provided.
Governments willing to impose sufficiently strict regulations can completely remove risk for savers.
There are no absolutely irrefutable arguments justifying the regulation of financial institutions.
There is a trend today toward gradually allowing private markets to discipline risk-taking by financial
institutions and minimize the role of government.
Deregulation could bring about decreased profits for financial institutions.
Deregulation of a financial service industry could usher in greater risk and lead to more business
The regulatory dialectic concept states that regulation of financial-service companies tends to lead to
innovations in new services and to financial institutions aggressively looking for ways to lower their
Regulation tends to result in an increased market share for the regulated industry and a smaller market
share for unregulated firms offering the same products or services.
In the United States banking is more heavily regulated than is true in most other industrialized