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Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why governments regulate the banks to ensure that customers are protected and the country's economy is safeguarded.

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Raymundo Sporer

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2y ago
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13y ago

Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why governments regulate the banks to ensure that customers are protected and the country's economy is safeguarded.

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8y ago

The Great Depression showed that we need to have a safe banking system with government oversight to prevent panic.

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Q: Why do governments regulate banks?
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Related questions

Why do government regulate from banks?

Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why governments regulate the banks to ensure that customers are protected and the country's economy is safeguarded.


Why does government regulate banks?

Because banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. That is why governments regulate the banks to ensure that customers are protected and the country's economy is safeguarded.


What are the aim of banking supervision?

Banks are the financial intermediaries of the economy. If banks operate in an unsupervised manner they might cause economic chaos and uncertainty in the country. The Governments cant just let the banks do whatever they wish. That is why governments regulate the banks to ensure that customers are protected and the country's economy is safeguarded.


Who regulate the regional rural banks?

nabard


What effect did the sanctity of contracts have on state governments?

It limited the power of states to regulate businesses


The National Grange lobbied state governments to pass what laws?

The National Grange lobbied state governments to regulate railroad rates.


which element of a command economy is also used in a mixed economy (apex)?

governments provide economic services to citizens


How do governments correct for the unfairness of negative externalities?

They regulate firms and make such practices illegal.


What effect did the sanctity of contracts have on the governments power?

it limited the power of states to regulate business


What did the sanctity of contracts have on state governments power?

It limited the power of states to regulate businesses


One of the ways in which state governments regulate business is by?

One of the ways in which state governments regulate businesses is by requiring licenses for professionals. They also charter corporations.


What effect did the sanctity of contracts have on state governments ' power?

it limited the power of states to regulate business