Financial system oversight involves the monitoring and regulation of financial institutions and markets by governmental or independent bodies. This function aims to maintain stability, protect consumers, and prevent systemic risks within the broader financial landscape. It includes establishing rules for capital adequacy, market conduct, anti-money laundering, and data reporting. The scope of oversight is continually adapting to technological advancements and new financial products, such as digital assets.
Context
The expansion of digital assets has brought financial system oversight into sharp focus, as regulators grapple with integrating decentralized technologies into existing frameworks. A key discussion point involves determining which crypto entities fall under traditional financial regulations and where new, tailored rules are necessary. Effective oversight seeks to balance innovation with the imperative of safeguarding financial integrity and investor trust.
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