Write 15 page essay on the topic Discuss critically contemporary international approaches (e.g. World Bank, Financial Stability Board) to consumer credit regulat.Download file to see previous pages...

Write 15 page essay on the topic Discuss critically contemporary international approaches (e.g. World Bank, Financial Stability Board) to consumer credit regulat.

This reform has been accounted due to the growth in the consumer credits and rise in the numbers of consumer credit institutions1. Contextually, consumer credit is considered as a key driver of economic growth as it is used for the payment of services holding a major proportion of the industrial contribution obtained by any economy in the modern world2. In a general sense, consumer credit is that commodity, which is produced by the private sectors and then sold to the consumers. These regulations are fixed for the sale, available in a wide range of varieties. The most commonly observed regulations in the consumer credit are the price and the interest rates. The information and disclosure regulations are also persistent regarding the debt collection aspects in a particular country, also seemed to be an important aspect to the regulators and legislators as well3. In a recent affair, the European Commission (EC) has denoted the significant role of consumer credit in the growth of national economy and also the well being of the consumers and thus, it is seeking to adopt the credit regulation across the country4. The government has further planned to implement the policy of credit regulation across the country so as to regulate strong credit markets all over the nation along with the minimisation of the risk of debt. The strategic approach and aim of adopting the consumer credit regulation along with the objective further differs from one state to another. It can be well understood with the example of both Germany and France, which possess rates at a lower level ceiling along with lower legal maximums. Illustratively, the most stringently market based approach has been adopted by the UK with no rates of ceiling5. The government of the UK had introduced Consumer Credit Act 1974 in its constitution, which focuses on the protection of the consumers and control of traders along with taking due measures to implement the provisions of credit being regulated by the Director General of Fair Trading6. In this essay, the major concern has been drawn with the attention towards the critical evaluation of the contemporary international approaches to the consumer credit regulation. The essay has described the concept of consumer credit regulations in respect of the practical case study referrals of World Bank and Financial Stability Board. Defining Consumer Credit Regulation As per the subsidiary legislation of the UK in 2010, the ‘consumer credit regulation’ has been broken into words, viz. Customers and Credit, for drawing a clear understanding of the term. In accordance, consumer is a person who is responding to the trade or business under the regulations of the transaction7. On the other hand, the creditor is that person who has made a commitment to grant credits for performing trade and business. Thus, the consumer credit regulation implies the act that has been developed by the government body for the protection of the consumer and the creditor performing a trade or business. One of the useful terms that are usually used in the definition of consumer credit regulation is the credit agreement.