Prudential Regulation

Prudential regulation in Global Commerce Policy

In this regard, prudential regulation is: in financial services, terms used to describe an objective of market regulation by authorities to protect investors and depositors or to avoid instability or crises. Prudential measures require banks and insurance companies to maintain certain capital reserves and mandatory asset ratios. They have to meet strict reporting requirements. There is no agreement on what an optimal level of prudential control might be. The entries on trade policy in the Encyclopedia are here. Opinion is in favour of clear and enforceable prudential measures, but they have not prevented some spectacular exploits by financial services firms or company crashes. Prudential measures are not normally considered impediments to trade in financial services, and they do not have to be listed under the GATS as measures capable of affecting market access and national treatment.[1]

Prudential regulationin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Prudential regulation” entry (OAS)

See Also