{"id":24414,"date":"2015-02-20T08:14:01","date_gmt":"2015-02-20T08:14:01","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=24414"},"modified":"2024-04-03T13:15:31","modified_gmt":"2024-04-03T07:45:31","slug":"prudential-control","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/","title":{"rendered":"Prudential Control"},"content":{"rendered":"

\"Prudential<\/a><\/p>\n

Why is Prudential Control important in an economy?<\/p>\n

The central bank (or another government institution) is expected to protect\u00a0the economy from suffering the effects of a financial crisis.<\/p>\n

It is widely accepted that the\u00a0banking system has a unique position in the national economy. A widespread collapse\u00a0can lead to a decline in the intermediation , money transmission and liquidity services\u00a0supplied by banks, which will, in turn, contribute to an inefficient allocation of resources\u00a0in the economy.<\/p>\n

There are additional macroeconomic ramifications if there is a continuous\u00a0reduction in the money supply growth rate or rise in interest rates.A bank run begins when customers withdraw their deposits because they fear the bank\u00a0will fail. Immediately, the bank finds it is unable to supply one of its key services: liquidity.\u00a0The banking system is vulnerable to contagion effects: a lack of confidence\u00a0associated with one poorly performing bank spreads to other, healthy, banks because agents\u00a0know that once a run on deposits begins, liquidated bank assets will decline in value, so\u00a0everyone will want to withdraw their deposits before the run gains some momentum. In the\u00a0absence of perfect information about the quality of each bank, the sudden collapse of one\u00a0bank often prompts runs on another, healthy, banks.<\/p>\n

 <\/p>\n

Click here for government certification in Accounting, Banking & Finance<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Why is Prudential Control important in an economy? The central bank (or another government institution) is expected to protect\u00a0the economy from suffering the effects of a financial crisis. It is widely accepted that the\u00a0banking system has a unique position in the national economy. A widespread collapse\u00a0can lead to a decline in the intermediation , money…<\/p>\n","protected":false},"author":625,"featured_media":25331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2189,1366,2188,2187],"class_list":["post-24414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-crisis","tag-economy","tag-protection","tag-prudential-control"],"acf":[],"yoast_head":"\nPrudential Control<\/title>\n<meta name=\"description\" content=\"What does one mean by Prudential Control and why is it important?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Prudential Control\" \/>\n<meta property=\"og:description\" content=\"What does one mean by Prudential Control and why is it important?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/\" \/>\n<meta property=\"og:site_name\" content=\"Vskills Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\" \/>\n<meta property=\"article:published_time\" content=\"2015-02-20T08:14:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-03T07:45:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/Prudential-Control.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"1200\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Sneh lata\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sneh lata\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/\",\"name\":\"Prudential Control\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/Prudential-Control.jpg\",\"datePublished\":\"2015-02-20T08:14:01+00:00\",\"dateModified\":\"2024-04-03T07:45:31+00:00\",\"author\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/268a02ac43c21c08a0decf13b7827a99\"},\"description\":\"What does one mean by Prudential Control and why is it important?\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/Prudential-Control.jpg\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/Prudential-Control.jpg\",\"width\":1200,\"height\":1200},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/prudential-control\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Prudential Control\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/\",\"name\":\"Vskills Blog\",\"description\":\"Vskills - 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