Today, I want to talk about how financial regulation can strike a balance between

protecting the financial system and promoting economic growth.

Financial regulation is essential for maintaining a stable and efficient financial

system. It helps to protect consumers from fraud, ensure fair and transparent
financial transactions, and reduce the risk of financial crises.

However, too much regulation can stifle innovation and economic growth. Financial
institutions need to be able to take risks in order to invest and lend money, which is
essential for economic growth.

So, how can we strike the right balance between regulation and economic growth?

One way is to focus on risk-based regulation. This means tailoring regulations to the
specific risks posed by different financial institutions and activities. For example,
banks that take on more risk may be required to hold more capital.

Another way to strike the right balance is to make regulations more flexible and
adaptable to change. This is important because the financial system is constantly
evolving, and new risks are emerging all the time.

Finally, it is important to coordinate financial regulation across different countries.

This helps to prevent financial institutions from moving to jurisdictions with less
stringent regulations.

Here are some specific examples of how financial regulation can promote economic
growth:

 Capital requirements: Capital requirements force banks to hold a certain amount of

capital relative to their risk-weighted assets. This helps to ensure that banks have
enough capital to absorb losses without failing. This can help to prevent financial
crises, which can have a devastating impact on the economy.
 Consumer protection regulations: Consumer protection regulations help to protect
consumers from fraud and unfair practices. This can help to increase consumer
confidence in the financial system and encourage people to save and invest.
 Anti-money laundering regulations: Anti-money laundering regulations help to
prevent criminals from using the financial system to launder money. This can help to
protect the financial system from instability and promote economic growth.

In conclusion, financial regulation is essential for maintaining a stable and efficient

financial system, which is essential for economic growth. However, too much
regulation can stifle innovation and economic growth. It is important to strike the right
balance between regulation and economic growth by focusing on risk-based
regulation, making regulations more flexible and adaptable to change, and
coordinating financial regulation across different countries.
Thank you