Banking regulation cannot be justified on the basis of:

Question

Quizplus · Accepted Answer

Banking regulation is often justified on the basis of addressing market failures (such as information asymmetry between banks and their customers, or the systemic risk posed by bank failures) and curbing excessive market power that can lead to monopolistic or oligopolistic situations. However, the presence of symmetry of information flows between buyers and sellers (which means both parties have equal access to relevant information) would not justify the need for banking regulation, as this condition suggests a well-functioning market where both sides can make informed decisions.

Banking Regulation Cannot Be Justified on the Basis Of