1. Please write introduction and conclusion for question B? 1. Please write intr
ID: 391178 • Letter: 1
Question
1. Please write introduction and conclusion for question B? 1. Please write introduction and conclusion for question B? Remarks - question A and B answers are below attach files .
(1) Financial Markets and Financial Systems (a) Select a country and illustrate the main objectives of imposing financial regulations by the government. The Icelandic Association of the European Economic Area (EEA) provides for the creation of monetary rules for EU rules and regulations. The Financial Supervisory Authority (FME) oversees activities and monetary objects that work in the monetary and assurance areas, even though the central bank assumes liquidity controls and manages liquidity. In addition, the Financial Supervisory Authority and the Central Bank of Iceland have a collaboration contract whose key objective is to reinforce collaboration and conversation of evidence amon the two organizations (Eiger, 2006). Eiger, Z. (2006). [online] Media.mofo.com. Available at: http://media.mofo.com/files/uploads/Images/Regulation-of- financial-institutions-Iceland.pdf [Accessed 27 Mar. 2006] Supervision In Iceland, there is a combined financial market regulator, the Financial Supervisory Authority (FME). The Financial Supervisory Authority is a government specialist with its private management panel. Its mission is to safeguard that the acts of the assemblies subject to the regulations comply with the rules and regulations and that they are reliable with admiration, with complete and satisfactory commercial performances (Bingham 2012) 1. Profitable, Funds and Investment Banks 2 Credit subdivisions of co-operative civilizations . Safeties corporations and sanctuaries brokerages 4 Annuity Capitals and Organization businesses of UCITS s. Stock connections and dominant safeties banks 6. Assurance businesses and assurance agents (approved to work in Iceland) Numerous other monetary organizations operating in compliance with higher regulation are also focused on EM management, in peak particularly the Housing Finance Fund (Bingham, 2012)
Explanation / Answer
It will be seen that relationship between financial system and real economy is favorable, positive or direct, if credit constraints and inefficiencies of financial sector are not present. This is consistent with the results found by the second approach described above. Consequently, the linkage is negative when financial system is not efficiently while reallocating resources in its possession, as a result a negative impact on economic growth takes place. Iceland is a small country and have a global financial footprint on the globe. The economics of the country in recent times saw a fall due to loop holes in the system. The FME to be precise was very carefree and casual when it came to matters of regulations and supervision that needed to be in place relating the banking system. Later ministry of Economics Affair was introduces which dealt with both FME and CBI, more discretionary powers weregiven to FME. A bill was proposed many reforms were changed, many flaws were indentified like bank creidt card risk. After central bank act was launched in Feb 2009, 2 instead of 3 membered board was made which has a governor and a deputy governor. Post which came the judicial decision in which car loans that were given against currency shootedup during repayment. After regilations were put to place in 2010 car loans were paid by domestic currency so now the liability moved from customers to banks.
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