NAME:

EZENWA CHIDUMEBI VICTORIA

COURSE:
ECO 262
(MONETARY ECONOMICS)
DEPARTMENT:
DEPARTMENT OF ECONOMICS
FACULTY:
FACULTY OF SOCIAL SCIENCES
MATRICULATION NUMBER:
VUG/ECO/22/8077
LEVEL:
200 LEVEL
LECTURER:
MR. BENJAMIN OGUCHI
SCHOOL:
VERITAS UNIVERSITY ABUJA
QUESTION:
THE GLOBAL SCENARIO PRESENTS A SITUATION IN WHICH
FINANCIAL REGULATION AND SUPERVISION IS ALMOST
IMPOSSIBLE. HOW TRUE IS THIS STATEMENT?
INTRODUCTION
A global scenario refers to a narrative or projection about the future state of the world, taking
into account various social, economic, political, technological, and environmental factors. It is
used to explore and understand potential developments and outcomes over time, helping
policymakers, businesses, and researchers prepare for and respond to future challenges and
opportunities.The words regulate and supervise go hand in hand and are synonymous in meaning
to each other. It means to direct or maintain something, according to a set of standards, and
ensuring that activities are carried out correctly. Financial regulation refers to the rules and laws
of firms operating in the financial sector of an economy, and financial supervision means the act
of monitoring the behavior of financial institutions which includes compliance with rules and
regulations. Financial regulatory and supervisory bodies are in charge of carrying out these
activities, however, the global scenario represents a situation in which financial regulation and
supervision is almost impossible. In this work I am going to be discussing how true this
statement is.

IS FIANACIAL REGULATION AND SUPERVISION

IMPOSSIBLE?
The global scenario presents a situation in which financial regulation and supervision is almost
impossible. How true is this statement? This statement is not entirely true, but its closer to being
true than false, as the global scenario does not present a situation in which financial regulation
and supervision is impossible. Around the globe, countries all have bodies and institutions,
which are in charge of the regulation and supervision of the financial sectors of the economy.
Such bodies include Apex Banks. In Nigeria such regulatory and supervisory bodies include the
Central Bank of Nigeria, The security and exchange commission, the Security and Exchange
Commission (SEC), The Nigeria Deposit Insurance Company (NDIC), etc. Financial regulation
and supervision, takes place on a daily basis around the world in other to protect, control and
regulate and monitor the financial sector, and through my day to day living it is seen to be very
possible. These regulatory and supervisory bodies, have proved to an extent, to be capable of
regulating and supervising the financial sector. However, there are challenges to effective
financial regulation and supervision, which makes this statement slightly true. These issues will
be listed and explained below:
● Uncertainty of the appropriate number of regulatory agencies that should be in charge
and what function to carry out: There is usually the problem of Uncertainty of the
appropriate number of regulatory agencies to carry out a particular function and what
function should be carried out by specific agencies. Whether a particular regulatory
function should be carried out by one body or more.

● The Role of the Central Bank in Regulatory and supervisory Roles: An issue normally
arises on whether the central bank should be the only financial regulatory and supervisory
 body in a country, or the work should be broken down and carried out by different
financial institutions.

● Which Agencies are to Carry out Which Functions and Objectives: The issue of what
functions and objectives are to be carried out by regulatory institutions, normally arises,
as it is normally hard to determine which objectives and functions should be carried out
by which regulatory and supervisory bodies, when they are all aimed towards similar
ends. This tends to create overlapping activities.

● The Degree of Political Independence of Financial and Regulatory Bodies: The issue of
how independent regulatory and supervisory bodies should be from politics arises, as
individuals would like to make use of regulatory and supervisory bodies to their own
benefits which shouldn't be the case, but at the same time, the government and these
regulatory bodies work hand in hand to implement certain policies, which makes the
degree of independence hard to determine.

● External Interferences: Financial regulation and supervision is hard to carry out, when
there are interferences from external counties and situations, as certain factors that occur
outside an economy are most likely to affect their financial situations and therefore not
giving a country total control of their financial regulation and supervision.

CONCLUSION
In conclusion, financial regulation and supervision is possible, but at the same there are some
challenges to effective regulation, making the statement not true but also not completely false.
Some of these issues include, external interferences, the degree of political independence, what
agencies are to Carry out what functions, the role of the central bank, the appropriate amount of
agencies to carry out functions, etc.
REFERNCE
● Oduor, J., & Kebba, J. (2019). Financial sector regulation and governance in Africa. In
Elsevier eBooks (pp. 137–163). https://doi.org/10.1016/b978-0-12-814164-9.00007-4
● Marquardt, J. C. (1987, May 1). Financial market supervision: some conceptual issues.
https://www.bis.org/publ/econ19.htm