What is the role of financial regulators in the USA?

Financial regulators

There are several federal and state entities that control and supervise capital markets and corporations. These organizations have an exact list of roles and obligations that enable them to operate on their while at the same time, fulfilling common goals.

Even if specific other organizations' views differ from efficiency to efficiency and from need, each of them has some aims and is more likely to be around for some time. In this sense, several regulatory bodies involved in the United States financial industry are examined in this report.

The Federal Reserve Board

One of the most known administrative agencies is the Federal Reserve Board (FRB). The "Fed" is, therefore, sometimes suspected of economic crises or declares economic stimuli. It affects capital, liquidity, and complete credit conditions. the primary instrument for enforcing monetary policy is the competitive market practices that regulate the United States' buying and selling.

Purchases and sales can modify the reserves quantity or the federal funds rate – the rate at which depositors lend their balance overnight to other deposits. It also controls and governs the banking system to provide the economic environment with overall stability. The Federal Open Market Committee decides the Fed's decisions.

One of the FRB’s main regulatory functions is supervising the US Company banking industry. The Federal Reserve Scheme may be a component of most national banks, although the Office of the Currency Comptrollers (OCC) rules extend. The Federal Reserve controls and oversees several central banks since it is a Federal Fund Holding Corporation Authority (BHCs).

Comptroller of the Currency

A National Currency Legislation was founded in 1863 as one of the oldest federal organizations, the Currency Comptroller. His primary goal is to monitor, control, and charter the banks in the United States and ensure the overall financial environment is stable. This regulation allows banks to perform and provide economic and financial services efficiently.

The OCC is an autonomous unit in the Treasury Department. Its mission statement verifies it ensures the secure and stable activity of national banking and federal savings institutions, equal access to financial resources, equal consumer support, and conformity with the relevant laws and regulations.

Federal Deposit Insurance Corporation

The FDIC is typically paid for 100 % of bank deposits, deposit accounts, and money market accounts. The provision involves single pension assets (IRAs), but only sections related to the previously mentioned form of accounts. Joint assets, revocable and irrevocable trust assets, mutual compensation arrangements, and incorporated partnership accounts are included.

FDIC policy does not include investment plans, pensions, savings schemes, securities, or shares, and It does not require insurance. FDIC covers often do not contain the contents of safe deposit boxes. The FDIC remains completely secured by cashier's cheques and cash orders given by the collapsing bank.

Office of thrift supervision

In 1989, by way of the Financial Institutions Restructuring, Rehabilitation, and Compliance Act of 1989, the Thrift Office (OTS). It is only managed by controlling organizations. The OTS was identical to the OCC except that federal expenditure partnerships, often referred to as thrifts, savings and loans were controlled.

The OTS was integrated into the Office of the Currency Comptroller, the Federal Reserve Board of Governors, and the Consumer Financial Protection Bureau (CFPB). In 2012, the OTS was combined with other departments.

Commodity futures trading commission

The Commodity Futures Trading Commission (CEFC) is a different authority founded in 1974 to provide market competition and performance and govern commodity futures, options, and other associated derivatives markets. It also aims to defend members from market abuse, investigate abusive commercial practices and bribery, and ensure moving clearing systems.

The CFTC has operated since 1974, and the Act on the Modernization of the Goods of 2000 has been introduced in 2000. It altered the agency's environment by establishing a shared mechanism to control a single stock's future with the Securities and Exchange Commission.

Financial Industry Regulatory Authority

In 2007 its parent, the National Association of Securities Dealers (NASD), established the Financial Sector Regulatory Authority (FINRA). FINRA was initially established due to the 1934 Stock Exchange Act and is known as a Self-regulatory Agency (SRO).

FINRA supervises for the public all businesses active in the equity enterprise. It is also responsible for practitioners' instruction in financial management, licensing and inspecting employees, and supervising the consultation and arbitration procedures regarding client and employee conflicts.

State Insurance Regulators

Regulation authorities regulate, monitor, and supervise the insurance sector's actions in their countries and Its roles include customer safety, police prosecution, and implementation of civil proceedings. They can have permits and approvals, enabling candidates to apply their activities information.

Securities and Exchange Commission (SEC)

The Securities Exchange Act of 1934 created the SEC as a whole, independent of the US government. One of the most prominent and most influential entities, the SEC enforces the federal securities regulations and controls the majority's financial market. It encompasses the US shares, the futures and options markets, and all other electronic platforms and other international stock markets as well as its statutory scope. It also controls investment advisers who are not accountable to national regulatory agencies.

The SEC is only eligible to bring civil cases before either a federal or an administrative court. However, the SEC is also collaborating directly with those departments to offer facts and help in the legal phase. Felony prosecutions are the duty of the Department of Justice law enforcement officials.


Many of these government departments aim to control and safeguard those interested in their respective sectors. However, though their strategy can differ, federal departments also overlap government entities. It does not mean that state officials have less control because their duties and roles are far-reaching.

The understanding of finance, financial, and insurance laws may be frustrating. While certain people cannot communicate with these organizations, specifically, they may have an impact on their lives at any stage. It relates specifically to the Federal Reserve, where liquidity, interest ratesFinancial regulators, and credit markets play an essential role.





979 Words


Nov 06, 2020


2 Pages

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