Regulating financial institutions

Banks hold the public’s savings, so governments watch them closely. Financial regulatory bodies are government organisations that monitor, control and guide financial institutions to protect consumers. The main one is the central bank, owned and controlled by the government.

By the end of this page you can

• Describe the role of financial regulatory bodies
• Explain how a central bank controls bank lending
• Use the terms for central bank tools
• Answer questions on who regulates whom

Goals tick themselves off as you try the activities below.

Photo: CaribDigita, Public domain, via Wikimedia Commons. Cropped (date stamp removed), resized, JPEG q74.

The Central Bank of Barbados: the government’s bank and the banks’ regulator.