Final answer:
Financial systems and security markets are regulated to prevent loss of confidence, protect uninformed consumers, and ensure the safety and soundness of financial firms, which includes measures like the FDIC and SEC for maintaining stability in the financial system. Therefore, the correct option is A.
Step-by-step explanation:
Financial systems and security markets have regulations to prevent loss of confidence and contagion, protect consumers who may be poorly informed, and promote safety and soundness of financial firms. The overarching objectives of such regulations include improving accountability and transparency in the financial system, ending "too big to fail" scenarios, protecting the American taxpayer by eliminating bailouts, and shielding consumers from abusive financial services practices.
An example of regulatory action is the establishment of the Federal Deposit Insurance Corporation (FDIC), which guarantees depositors will receive their savings up to a certain amount in case of a bank failure, thereby increasing public confidence in the banking system.
Additionally, the Securities and Exchange Commission (SEC) oversees Wall Street activities to ensure fair trading and investment practices. These regulations are essential for maintaining a safe and stable national financial system, as vividly exemplified by the financial crisis of 2008-2009, when parts of the financial system nearly collapsed.