A strongly competitive financial industry will provide customers with the best deals for loans, deposits, insurance, and so on. Such an industry would also be more innovative and should provide a wider range of services. But the appropriate legislative framework for financial services cannot be one that simply maximizes competition without regard for the safety and soundness of the industry.
1  BIS Review 34/1999  Why all this concern about safety? And why do we regulate this particular industry more closely than virtually all others? There are two main reasons. First, the financial industry is the repository for the wealth of a large number of small savers.