Law Of Banking And Financial Institutions Benchmark Assignment

Law Of Banking And Financial Institutions Benchmark - Assignment Example When dealing with people and capital, conditions are always at stake. These conditions and the possible conflicts warrant legislation and regulations. Banking and the financial institutions, in general, are intensely regulated by the law. The legislation that has been set aside focus on regulating relationships between the financial institutions and its clients, the institutional securities, transaction and also regulate the tax compliance of the institutions. The need for legal help in banking is a common observation in the financial world. One section of banking that requires strict regulation is private banking. This is the part that involves personalized financial depositing of capital into a financial institution by an individual who has access to high income and therefore has no problem investing in the financial institution in large sizable assets (OConnor & Faille, 2000). The services are, therefore, offered in more personalized terms. In this case, the possibility of entering into a contract without full information is real. In addition, there is a danger of being shortchanged in the process. The legislation, therefore, co mes in to secure the instability of private banking. The risk with private banking including money laundering and litigation must be controlled by the government through the Office of Comptroller of Currencies (Schooner & Taylor, 2010). 2. The instability in the US banking sector in the early years was based on two issues. First, there was a level of inexperience that covered the banking industry. The lack of experience in identifying risks and responding to them led to the ultimate vulnerability. This failure was seen as many of the banks, especially those that were started just before the great recession in the 1930s failed to survive the crisis.