Prudential regulation ________.

Question

Quizplus · Accepted Answer

Prudential regulation helps to ensure the safety and soundness of financial institutions by setting standards for capital reserves, risk management, and other measures. By requiring banks to follow these regulations, it helps to prevent excessive risk-taking and encourages consumers to trust and use banks that are perceived as being safe and secure. It is not an example of government-directed credit, nor does it necessarily provide services to economically-disadvantaged households and businesses. It applies to both direct and indirect finance.

Prudential Regulation ________