Acta Economica (Feb 2012)
Actual trends of financial system regulation changes
Abstract
Every financial system due to risks of its complexity, dynamism and openness, is inevitably controlled and regulated by local and international regulations. Advantages of regulation for the health of the financial system are multiple, but the question is where are the boundaries of control and regulation, when it outgrows its effects and becomes the source of opportunity losses. This paper explores the genesis of control and regulation development in economy and financial system of a country, defines its domain and measures of effects, and highlights the positive effects and limitations of state intervention, i.e. regulation and supervision from the aspect of variations in conditions of their application. The process of harmonization of banking regulation and supervision at the international level is very important and happens analogous to implementation of the Basel agreements. The introduction and implementation of Basel agreements standards and recommendations of the Basel Committee has certainly contributed to financial stabilization of the banking system, and harmonization of international financial standardized reports necessary for rational decision-making during investment. Like any process, these processes will inevitably require some analysis of the benefits and costs of their implementation, and analysis of their cost-effectiveness.
