RFS - Module Overview

Regulating Financial Services

Introduction

What does it take to successfully run a financial organization??As with any business, most financial institutions are only as good as their management. In this module, you will look at what it takes to successfully run a financial organization. We will consider the skills managers need to run day-to-day operations, including IT management, as well as how managers must manage and motivate personnel. Finally, we will develop strategies for keeping up with and remaining in compliance with banking and finance regulations.

Essential Questions

  • Which organizations provide oversight for the financial industry?
  • What laws protect the consumer and investor from fraud in the financial industry?
  • How much fraud exists in the financial services industry?

Key Terms

regulatory guidelines: rules set forth by a government agency

internal audit: audit by a company's own personnel to determine the effectiveness of accounting procedures

bank examiners: usually representatives of state or federal government, they audit the banks' accounting records to make sure they are correct

deregulation: The process of removing constraints, especially government-imposed economic regulation is known as deregulation.

skimming: Skimming is an electronic method of capturing a victim's personal information used by identity thieves.

Phishing: Phishing is the activity of defrauding an online account holder of financial information by posing as a legitimate company.

churning: An illegal practice where insurance agents unnecessarily replace existing life insurance for the purpose of earning additional (higher) first-year commissions is known as churning

misrepresentation: A false statement of fact made by one party to another party, which has the effect of inducing that party into the contract is a misrepresentation.

fraud: Wrongful or criminal deception intended to result in financial or personal gain is fraud.

kiting: A fraudulent act involving the alteration or issuance of a check or draft with insufficient funds is known as kiting

forgery: Forgery is the action of forging or producing a copy of a document, signature, banknote, or work of art.

ethics: Ethics are moral principles that govern a person's or group's behavior.

money laundering: Money laundering is the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses

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