Short Description on Banking regulation

1. financialregulatory mechanisms and regulation of the banking industry in particular can be considered extremely important. Capital
accumulation and allocation of financialresources are crucialto economic development of each country.
Regulation and supervision of the business activities, pertaining to the banking industry units w illbe essentialfor their effective
functioning. Generally, the concept of bankingregulation and supervision is defined as controlover the creation, operation, and
liquidation of banks.
The most general definition of the concept of banking regulation and supervision is controlover the creation, operation, and
liquidation of banks. Such controlis very diverse, carried out by specialized banking supervisory authorities.
Although banking regulation and supervision is generally focused on the financialstate and business performance of individual
banks, its main purpose is to maintain stability of the banking industry. To achieve this goal, banking supervision takes precautions
for preventing loss to depositors, and thereby helping to sustain public confidence in banks and the banking industry as a w hole.
The role of banking regulation and supervision is to create an environment, w hich supports only reliable and prudent banks and
reduces excessive risk-taking.