Final answer:
The Banks and specialized Deposit Taking Institutions Act of 2016 (Act 930) addresses difficulties in the financial system through increased regulation, technological advancements, government interventions, and market-driven solutions. Other novel ways to resolve challenges include promoting financial literacy, enhancing cybersecurity, fostering international cooperation, and exploring new technologies.
Step-by-step explanation:
Difficulties associated with the financial system include instability, the risk of excessive risk-taking, and the potential for market failures. The Banks and specialized Deposit Taking Institutions Act of 2016 (Act 930) attempts to address these challenges through increased regulation, technological advancements, government interventions, and market-driven solutions.
- Increased regulation: The act establishes stricter regulations and supervision to ensure the stability and soundness of financial institutions, reducing the risk of failures and protecting consumers' interests.
- Technological advancements: The act encourages the adoption of technology in financial operations, allowing for more efficient and secure transactions, risk management, and customer service.
- Government interventions: The act provides the government with tools to intervene in the case of financial crises or systemic risks, ensuring the orderly functioning of the financial system.
- Market-driven solutions: The act encourages competition and market-based solutions as drivers for innovation, efficiency, and risk management within the financial system.
Additional novel ways to address financial system challenges may involve promoting financial literacy and education, enhancing cybersecurity measures, fostering international cooperation, and exploring new technologies like blockchain and digital currencies.