What are Banking Regulations and Supervisions?

The Crash of 2008

Growing up we have all experienced restriction or been under supervision in one form or another either at home with our guardians or from our teachers at school, and the life in banking is no different. Different cities, continents, countries and states each have a different policy on how their banks should operate to create a transparency between the banking institutions and those whom they conduct operations with, for example, individuals and organisations.

Why Do we have Regulations and Supervisions?

Financial performance is measured to eradicate any foul-play and risk, Summer (2003) describes the control of systematic risk as "one of the main arguments for banking regulations", which is not so uncommon among the elitists who sometimes believe they are untouchable.. we will find out more later on in the blog. The supervision carried out by government regulators ensures a safe operating space among banks around the world.

Source: The Balance; Financial Crisis

Yes. We are going there. I am talking about the crash of 2008. I know most you do not want to revisit those terrible times mostly for our parents and grandparents sake (as we were too young to feel the financial impact directly) but this does not mean that, like many others, I did not feel any feel any repercussions of the decisions made by those in charge. It started with the Lehman brothers filing for bankruptcy 15 September 2008, the biggest since records began all the way down to your everyday average man, woman, aunt, uncle, brother, sister, husband, wife and family.. you get where I am going with this basically everyone - no one escaped this disaster unscathed.

Bankers pre 2008

The stats provided in the picture above give you somewhat of an understanding as to just how detrimental this market crash was
and it may not even do the crisis justice - it is only a snapshot!

Could the Crash have been Prevented?

This crisis hit the rich hard and poor even harder all because the regulations put in place were not followed and supervised as originally intended to prevent such events - national banks are required to be members of the Federal Reserve System (FRS) and

Bankers post 2008

regulated through the Office of the Comptroller of the Currency (OCC). The FRS is the supervisor for most large banking institutions as they are the federal regulators for Bank Holding Companies (BHC).