Why depository institutions are today the most regulated firms?

Depository institutions, such as banks and credit unions, are among the most regulated firms because they play a critical role in the financial system and the economy by accepting deposits and providing loans. Their failure can lead to significant systemic risks, affecting the stability of the entire financial sector. Additionally, regulations are designed to protect consumers, ensure the safety of deposits, and maintain public confidence in the financial system. These institutions must adhere to strict capital requirements, reporting standards, and compliance measures to mitigate risks and promote transparency.