Why are Financial Services Affected?

Abstract

A main concern for financial services is the preservation of the structure of trust that results from good governance and transparency in the operation of markets. Regulatory compliance is a demonstration of this desire to engender trust. If we consider the financial sector as a whole and sketch some of its main features, the significance of compliance becomes clear. One of the main sectors of an economy is that covered by the financial sector. Any economy has a number of interrelated but separable sectors that dominate its activities. These consist of “households and non-profit institutions and serving households,” “non-financial corporations,” “financial corporations,” “general government,” and “rest of the world.” The financial sector is largely represented by financial corporations, which in turn can be subdivided into: monetary financial institutions insurance corporations and pension funds other financial intermediaries and auxiliaries.