Financial regulations are rules and laws that govern how financial institutions, such as banks and investment firms, operate. These regulations are designed to protect consumers, ensure the stability of the financial system, and prevent fraud and abuse. They cover various aspects, including lending practices, capital requirements, and reporting standards. Regulatory bodies, like the Securities and Exchange Commission (SEC) and the Federal Reserve, enforce these regulations. By monitoring financial activities, they help maintain transparency and trust in the financial markets. Compliance with these regulations is essential for institutions to operate legally and maintain their licenses.