How government policy affect US banking system Essay

How government policy affect US banking placement - Essay ExampleThe demand-deposit control has turned banks into the middle agents and the principal agents in the US payment administration and the financial transactions taking place. The costs and the benefits of banking regulation include the major industry changes witnessed that include net and electronic banking data processing models improved communication and the development of more complex risk counsel and financial instruments (Graig, 1983). Government policy on the banking sector determines the outlook of the banking system, influencing the entry of players in the system and find out who is capable of engaging in the banking disdain. The policy definitions offer guidance on who can operate a bank, which services can be traded, and models of expansion that can be employed by banks. Banking regulation in the US increases the protection offered to depositors (Ambrose, Michael, &Anthony, 2005). This adjusted effect came af ter the government recognized that increase numbers were conducting their business through banks, and deposits of businesses and individuals were increasing. Banking regulations imposed the improvement of financial and monetary stability. This was introduced in reaction to the recognition that there was an increasing take aim of transactions and businesses carried out among businesses and individuals (Spong, 2000). ... ation on the US banking structure increased competition among banking sector players, which was anticipate to improve the quality and the efficiency of the services delivered to customers (Graig, 1983). Government policy and regulation have increased the level of consumer protection observed in the US banking system, through a number of ways. These ways include safeguarding the moneys saved in the bank as well as improving the quality of services offered by banks (Rezende, 2011). The banking commandment and regulation of the 1970s and 1980s led to the development of a more open and competitive banking system. The policies too led to the adoption of technological models that could improve the quality of banking services offered in the US. The effect of the regulation as well as improved the capacity of banks to serve the increasing number of customers, as well as adapt to the ever-changing economic environment. Some of the regulations that created this effect include the International Banking Act of 1978 (Spong, 2000), which required equitable treatment among twain domestic and foreign bankers, in different areas, including reserve deposits, branching and the observance of banking regulations (Spong, 2000). The second was the financial Institutions restrictive and Interest Rate Control Act of 1978, which sought to eliminate different forms of financial abuses (Federal Reserve, 2010). The Act withal increased the capacity of regulatory agencies in avoiding the concentration of management and control. The other is the Depository Institutio ns and Deregulation and monetary control Act of 1980 (Spong, 2000), which sought to ensure that the different financial institutions did their business from a more catch and efficient competition ground (Rezende, 2011). Government policy led to the