WHY AND HOW MUCH BANKS MUST BE UNDER GOVERNMENT REGULATION

Abstract

Bank of the market institutions of special importance. One of the key role of banks is to preserve private and public savings. The importance of saving for the level of investment and economic development is enormous. This points to the importance of banks. They are the market institutions of special importance because the level of efficiency of their function greatly determines the efficiency of the economy. Hence the importance of regulating their business. The level of state regulation is controversial in theory and in practice is subject to change.