Thus, the object of regulation itself is susceptible to some overlap, but the major issue in this regard relates to the regulation of banks, namely whether banks should be necessarily treated as a separate and special group of institution for regulatory purposes. There has been significant debate on whether banks are special, and should be treated as such.
The rapid development of capital markets, increasing importance of non-bank sources of financial intermediation and the emergence of universal banking have led to the erosion of importance as well as uniqueness of banks as financial institutions. There are, however, three major reasons adduced for treating them as special.