Ethics, Financial Services and Regulation (Chapter 4A)
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Ethics in Banking — Ethics in Banking.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the key distinction between rules-based and principles-based regulation in the financial sector?
Rules-based regulation prescribes specific actions institutions must follow, while principles-based regulation sets broad objectives and allows institutions to use their own ethical frameworks to achieve them.
How does the RBI define Central Bank Digital Currency (CBDC)?
Legal tender issued by a central bank in digital form, exchangeable at par.
In what direction has financial sector regulation in India shifted in recent years?
Financial sector regulation in India has moved from prescriptive rules-based regulation toward principles-based regulation, giving institutions greater flexibility in meeting regulatory objectives.
What distinguishes CBDC from cryptocurrencies according to the chapter?
CBDC is legal tender issued by the central bank; cryptocurrencies are not.
Why does principles-based regulation give financial institutions greater flexibility?
Principles-based regulation allows financial institutions to achieve regulatory objectives through their own ethical frameworks rather than following rigid prescriptive rules.
What are early warning signals that a borrower's account may be stressed?
Delayed stock statements, falling sales, and rising cheque returns.
What is the primary purpose of financial sector regulation in the context of ethics?
The primary purpose is to ensure that financial institutions act with integrity and in the best interests of customers and the broader economy, underpinned by ethical conduct.
What was the fundamental flaw in Silicon Valley Bank's balance sheet structure?
Asset-liability mismatch: long-term HTM bonds funded by liquid uninsured deposits.
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