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Financial Regulations and Public Understanding: A
Communication Approach
Kakembo Aisha Annet
Faculty of Education, Kampala International University, Uganda
ABSTRACT
The 2007–2008 global financial crisis revealed critical gaps not only in regulatory frameworks but also in
the public's understanding of financial systems. This paper explores how financial institutions and
regulatory bodies have adapted their communication strategies to rebuild public trust and enhance
comprehension of financial regulations. By conceptualizing financial breakdowns as unique crises, the
study proposes a tailored communication framework suited to the complexities of financial regulation.
Through case studies of the Dodd-Frank Act and Basel III, the research highlights the varied reception
and comprehension of financial policies across different social contexts. The paper argues that effective
communication, grounded in transparency, socio-cultural awareness, and digital literacy, is essential for
the legitimacy and efficacy of financial governance. It concludes with insights on integrating
technological innovations and data-driven tools to measure and enhance public understanding, ultimately
fostering resilient financial systems and informed citizenry.
Keywords: financial regulations, public understanding, financial communication, trust and transparency,
crisis communication, financial literacy, Basel III.
INTRODUCTION
Financial crises affect organizations and society, representing a breakdown in trust among those handling
public funds. This article examines how financial organizations adapted their communication processes in
response to the 2007-2008 crisis to rebuild public trust. It starts by defining financial breakdowns as a
unique crisis type with implications for both individual entities and society. A framework is proposed for
adjusting communication strategies to distinct crisis characteristics, applied to identify the specific needs
of financial organizations emerging from these crises. The conclusion presents the main implications and
suggests future directions for management and research. Historical analyses indicate that the 2008 events
signal an evolution unseen in 80 years, echoing classic theories related to speculation, illiquid
investments, and economic cycles from 1929. However, these events prompt new questions about
society's reliance on trust: What is the significance of truths when trust is foundational? Who bears moral
responsibility in such a framework? How is trust preserved amid dysfunction, significantly impacting
organizational and societal integrity? Furthermore, how do various organizational levels respond to the
crises, and who is accountable to whom? Given the unprecedented nature of these systemic breakdowns,
organizations must navigate novel environments, calling for urgent examination [1, 2].
The Importance of Financial Regulations
Financial regulations represent an essential component of the efforts to preserve public confidence in the
banking systems, which in turn represent a precondition for their proper functioning. Inadequate financial
regulations can lead to the perception of the banking systems as unsafe and unreliable, which would
trigger withdrawals of deposits and therefore impact the stability of the banking systems concerned. On
the other hand, an overly strict regulatory framework can block the functioning of safety valves for the
banking systems, like secondary markets for banking products, or impede the transnational regulation
necessary in today’s interconnected world. Financial regulations are formulated at two levels: globally
and locally. As reactions to the excesses of the collapse of the mortgage markets in the US in mid-2007
EURASIAN EXPERIMENT JOURNAL OF HUMANITIES AND
SOCIAL SCIENCES (EEJHSS) ISSN: 2992-4111
©EEJHSS Publications Volume 7 Issue 2 2025

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and the insemination of this to the financial markets and banking systems of most of the developed and
emerging economies, the Financial Stability Forum was charged with analyzing the regulations
governing the banking systems to propose new ones and remodel existing ones. The FSF proposed a
series of regulations that were accepted by the leaders of G20 states at the London Summit in 2009. The
Basel Committee on Banking Supervision was subsequently charged with formulating more detailed
regulations and guidelines that would govern the banking systems in OECD and G20 states. A
significant part of these proposed regulations and guidelines was adopted within the European Union and
by many other states as well. After this, central banks, and particularly the Euro area’s core states,
retaliated by taking financial measures to preserve public confidence in the banking system, which
resulted in alarmingly high price hikes since early April 2008. It is an accepted notion that an unequivocal
banking system is imperative for public confidence in any country. This is all the more so in the case of
the transnational banking systems of the most developed states. On the other hand, a banking system that
ever lowers rates to convince the public to invest their hard-earned savings cannot be credible either, and
a banking system that refuses to accept deposits at the cost of invisible prices troubles people’s good
judgment regarding its reliability [3, 4].
Public Understanding of Financial Regulations
Research on public understanding of financial regulations is limited, despite calls for more focus on
communication issues related to them. This gap is concerning in light of the significant regulatory
changes since the global financial crisis, which occurred between 2007-2009 due to the collapse of the
U.S. subprime mortgage sector. This crisis led to severe global economic downturns, prompting
governments to implement regulations to repair financial systems. Although substantial regulatory
measures were enacted during and after this period, little academic inquiry has addressed widespread
misconceptions regarding these complex regulations. This study aims to explore societal understanding
of financial regulations, which are inherently more complicated than routine government policies. These
regulations are crucial in driving market forces affecting individual behaviors, with brokers interacting
directly with markets on traders' behalf, often without visible compliance metrics. The intricacies of
algorithmic trading and mathematical electronic systems call for deeper analysis by communication
scholars. It is essential to develop and share clearer frameworks for financial regulations with the public,
who often lack understanding amid the obscure motivations behind complex terms like high-frequency
trading. Such efforts should consider socio-cultural communication principles to effectively shape and
disseminate public knowledge [5, 6].
Communication Strategies
The low level of understanding of finance is often attributed to a lack of education among the public;
however, it is not enough to simply educate the public on its importance. Financial literacy is necessary to
understand financial regulations, particularly in complex finance-related markets. Financial regulators
have the significant task of establishing their credibility in the eyes of the public. This requires consistent
communication, careful selection of communication channels, and the promotion of public understanding
of financial regulations. These communication strategies are also valid for non-financial regulators when
attempting to build credibility and public acceptance of regulatory policies. For a policy to be fully
accepted by the public, stakeholders must communicate their understanding of that policy in their
argument. As a policy evolves, it obliges fresh communication from all stakeholders regarding the
modified political landscape and reasons behind choosing the new course of action. It cannot be stressed
enough how critical these communication steps are, as the absence of them can undermine both a policy's
understanding and credibility. Given that a policy is most effectively communicated by those who are not
a part of the audience, a policy must be robust enough to withstand traditional criticism. It is common to
attempt the establishment of public communication after engagement with a major component of a new
policy has occurred, thus limiting understanding at the very moment when understanding is most needed.
About finance, it is easy for rationality to give way to emotion. The media can easily become filled with
fear, uncertainty, and doubt regarding financial regulatory policies; such messages spread much faster
than their opposing and calming counterparts would. Therefore, it is unfair to expect the media to
withstand coverage of a regulatory issue at all costs because of the need to publish news [7, 8].
Case Studies
This study utilizes case studies through a communication approach in understanding how financial
regulations are received by the public. Two cases are examined: 1) Dodd-Frank Wall Street Reform and
Consumer Protection Act; and 2) Basel III Framework. These cases were chosen because they had
significant impacts on the financial system, were widely covered in the press, and had extensive debate
among various stakeholders. To narrow the scope of research, the specific provisions that went into effect

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in the years 2018 and 2019 were selected due to time constraints, and the provision text was analyzed
through qualitative content analysis. The Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) is a piece of legislation that affects the financial industry in the United States. The
major provisions of the Dodd-Frank Act fall into eight major titles, composed of nearly 2000 pages, which
all include multiple rules and regulations. The Dodd-Frank Act is an omnibus bill designed to address a
wide range of complex issues, making it difficult to reach agreement on a single legislative measure.
Topics included in the Dodd-Frank Act are: 1) financial stability, 2) regulation of large financial firms, 3)
regulation of over-the-counter derivatives, 4) consumer protection, 5) protection of investors, 6)
government authority to wind-down firms, 7) transparency of exposures to more risk, and 8) enforcement
of transparency and accountability rules. Basel III is a capital and liquidity framework agreed to by
members of the Basel Committee on Banking Supervision. Basel III was initially aimed at reforming the
banking system globally to increase the overall resilience of individual banks and the banking sector as a
whole. Two reasons for this are mainly: 1) to fix the shortcomings of Basel II, and 2) to cope with the new
risk developments in the financial system during the last decades. Basel III is a revised version of Basel II,
retaining the core of the earlier Basel capital framework. It includes a mix of stricter definitions of capital,
higher capital and liquidity ratios, a phase-in of the new measures and a gradual implementation over
several years until 2019 (or 2015 for some elements). Basel III has been hugely debated, and coverage of
Basel III in different societies has differed greatly [9, 10].
Role of Financial Institutions
Financial institutions, or financial intermediaries, are essential parts of the financial system that facilitate
the flow of funds between agents. They channel money from surplus units into loans or investments for
deficit units, thus playing a crucial mediating role. They can be categorized into deposit-taking and non-
deposit-taking institutions, with financial instruments divided into money and capital instruments based
on maturity. Maturity refers to the period between the origin of a financial instrument and its liquidation.
The financial system encompasses two markets: the money market for short-term debt instruments
(under one year) and the capital market for long-term debt and equity instruments (over one year).
Financial instruments are intangible assets defined by contracts, providing future benefits. Financial
regulation consists of interventions by authorized bodies to ensure fair treatment among market
participants, identify issues that disrupt market functioning, and implement measures to restore balance.
This regulatory response is undertaken by legally empowered entities, not by market participants
themselves [11, 12].
Regulatory Bodies and Communication
Depending on the jurisdiction, regulatory bodies in finance have different names and structures, such as
the SEC in the USA and the FSA in the UK. They communicate with the public through various
channels, proposing and adopting regulations that are published in government offices. These
organizations deliver public reports semi-annually and provide disclosures on risk assessments.
Occasionally, they issue press releases on controversial issues and may have their own media outlets.
Regulators enforce rules and monitor compliance with disclosure documents. Unlike financial institutions
focused on stakeholder interests, regulators aim to support the public interest. Their reports should
assess public understanding of regulations rather than just report on compliance. However, evaluating
public understanding is infrequent, as companies protect their interests while regulators consider societal
welfare. Post-2008 financial crisis, regulation has gained attention in the media, with regulators having
substantial input on financial markets. The crisis has heightened public awareness of government
intervention in these markets, increasing interest in regulations and posing communication challenges for
regulatory bodies [13, 14].
The Role of Technology
The Internet was originally developed to enable data exchange among researchers, primarily to facilitate
academic collaboration and the sharing of information. However, through numerous technological
advances and innovations, it has transformed into a ubiquitous phenomenon that permeates almost every
aspect of daily life. Communication has drastically shifted from traditional ‘matter’ to a more fluid and
dynamic form of ‘information’, and it has evolved from being merely an ‘instrument’ to becoming an
essential ‘process’ in everyday interactions. This profound change is reflected in how communication
companies have adapted their practices, blending various forms of voice, data, and video into cohesive
experiences. Information is now widely recognized as a product in its own right, with media
organizations working diligently to create content characterized by convergence, interactivity, and
persuasibility tailored to diverse audience interests and preferences. Content developers are now actively
marketing their offerings, with the primary aim of securing advertising revenue while fostering closer

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and more meaningful connections with their target audiences. In this evolving landscape, firms are
compelled to rethink their business models fundamentally, discarding outdated and inefficient structures
that separate programming, production, and distribution to compete effectively. To succeed in this
increasingly complex environment, companies must invest significantly in convergence strategies across
multiple media formats. This means employing unified audience analytics and creating integrated content
that harnesses the power of collective intelligence. Firms must also diversify their advertising revenue
streams and maintain acquisition of marketing control that influences consumer behaviors. This
convergence not only shifts our understanding of information but also likens data to intricate biological
systems that govern human function and interaction. Data can increasingly be seen as a vital raw
material, mined and processed to create a continuous and engaging flow of news, entertainment, and
valuable insights aimed at enriching the user experience [15, 16].
Measuring Public Understanding
Studies assessing public understanding of financial regulations were sparse in the years before the
pandemic. On the one hand, only a few studies have investigated public understanding of financial
regulations. On the other hand, despite the growing popularity of big data approaches for measuring
public understanding, regulation-related big data approaches are still rare. Unfortunately, however,
existing measures to assess public understanding of financial regulations have limitations that can hinder
fruitful communication. To enable communication about resources, interests, and information shared
regarding financial regulations, research efforts to develop more reliable and insightful measures of public
understanding are in demand. Most research efforts have focused on risk regulations of systemically
important financial institutions, while less focus has been given to perceptible market conduct regulations
to alleviate severe consumer deprivation. Moreover, literature measuring public understanding has
largely ignored high-volume markets and their unregulated operations, to which many systemic risks of
financial institutions are voluntarily transferred, as excessive use of these derivatives renders risk
regulations ineffective. Since big data approaches can easily cover unregulated operations, the possibility
of using them to examine public understanding of the rules has yet to be explored. The existing literature
has measured public understanding through near-term volatility and co-movements between stock prices,
returns, and volumes, bond ratings, interest rates, and yield spreads, and discussions and inquiries in
news articles and online forums regarding risk regulations. However, these measures cannot provide
proper insights or useful direction for intimacy, diligence, transparency, and continuous reciprocity of
communication on regulation-related entities, but instead focus attention on volatility, the edge of
intervention, and enforcement-related phenomena [17, 18].
Challenges in Financial Communication
Since the advent of the complex and multifaceted world economic crisis, which has had far-reaching
effects and serious repercussions across a broad spectrum of various sectors, many companies operating
within the banking, insurance, and financial industries have been compelled to confront an extensive array
of significant challenges that are directly related to their communication strategies. These challenges
manifest not only in their interactions with the public but also in their engagement with various other
categories of investors, which is paramount for maintaining and nurturing strong, lasting relationships. A
series of crucial aspects must be highlighted in this specific context, addressing how organizations should
effectively communicate during these turbulent and unpredictable periods of uncertainty, alongside the
growing rejection that they experience from their audience members. To successfully navigate this
tumultuous landscape, with all its unpredictability and complexity, it is essential and crucial for these
organizations to establish and maintain clear, consistent, and transparent channels of communication.
This proactive approach is necessary to actively rebuild and strengthen trust with their stakeholders. By
ensuring that concerns are acknowledged and addressed appropriately and promptly, organizations can
foster a significant sense of security and confidence among investors and clients alike, thereby enhancing
their reputation and viability in an increasingly challenging market environment [19, 20].
Future Directions
Little is known regarding public understanding of financial regulations. Research on this subject is
undoubtedly limited and direly needed, especially since financial regulations are a quite accentuated topic
of daily news consumption and because regulations are among the most powerful tools figures and boards
have to influence citizens’ consumption, loans, and investment behavior. In this regard, it can be
anticipated that with the exponentially growing interest in the behavior of financial organizations,
providing feedback and understanding by regulatory bodies, some new means of communication with
corresponding great potential for research will emerge. As an example, it can be expected that an
increasing number of online discussion forums and chats will be introduced, including information to

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educate the public and allow citizens to ask questions. In these tentative future directions, it should also
be noted that large country and world-level regulation figures cannot be expected to communicate
effectively and immediately as local associations and boards do. A comparable difference emanates, for
example, from the divergent cultures and historical, political, or economic settings of continents, nations,
and regions. As an illustration, it has not only to be distinguished whether financial regulations are
known and comprehended, but there are also causes and consequences diverging among, for instance,
citizens from Asia and Europe. All this indicates that analysis of public knowledge of legislation, and
additional domains of research, will not only deepen communication research in a topical but also in a
methodological way, including multi-national and multi-language research and writing. It is believed that
this research will support both the general public in becoming more literate in legislation as well as
figures of regulation or respective boards in obtaining lifelong protection and management of issues [21,
22].
Recommendations
After this paper, we propose a set of recommendations regarding financial regulation, a field still evolving
even in advanced economies. The complexity of creating and comprehending regulations is growing,
necessitating effective communication strategies. Our framework focuses on three key parties: regulators,
intermediaries, and the public, emphasizing the importance of including the public, often overlooked in
the literature. Public misunderstandings hinder acceptance and contribute to dissatisfaction. Instead of
solely academic criticism, public involvement in shaping regulations is encouraged. Regulatory risk
analysis and research should inform a better understanding of public needs, supported by extensive
literature reviews. These preparatory steps will guide optimal communication strategies tailored to
specific audiences. Selecting the right narrative is vital when presenting complex regulations; the starting
point can be regulators' proposals, but alternative narratives must also be considered. It's essential to
emphasize societal benefits and transparently address costs to avoid public mistrust. Continuous
engagement with the public is crucial to prevent superficial "one hit wonder" strategies that could lead to
disdain. Inviting public input during regulatory discussions fosters a sense of involvement. Impact
assessments should not only examine economic implications but also analyze potential public reactions,
with results being made available to inform regulatory development. Respecting the psychological safety
of discussions around rules can reinforce this area politically. Employing democratic principles could
challenge defenders of the current system. Understanding reactions to criticism, in addition to approval
ratings, will be valuable in shaping future regulations and research guidelines [23, 24].
CONCLUSION
The aftermath of the 2007–2008 financial crisis emphasized the need for stronger regulatory frameworks
and, equally, for better public comprehension of these frameworks. Financial institutions and regulatory
bodies have learned that trust cannot be mandated through policy alone; it must be earned and
maintained through consistent, transparent, and culturally attuned communication. This study
demonstrates that public understanding of financial regulation is shaped not only by the content of the
policies themselves but also by how these policies are conveyed and contextualized. Case studies of the
Dodd-Frank Act and Basel III reveal that even well-designed regulations can fail in their goals if they are
not effectively communicated to those they affect. To close the gap between regulatory intent and public
perception, financial communicators must adopt a multidimensional strategy—incorporating clear
messaging, education, digital engagement, and responsive feedback mechanisms. Furthermore, as
financial technologies evolve and regulation becomes increasingly complex, communication efforts must
also evolve to remain relevant and accessible. Future research should focus on developing robust metrics
for assessing public understanding, as well as exploring the role of emerging media in shaping regulatory
narratives. In doing so, stakeholders can ensure that financial regulation serves its ultimate purpose:
safeguarding both systemic stability and public trust.
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CITE AS: Kakembo Aisha Annet (2025). Financial Regulations and
Public Understanding: A Communication Approach. EURASIAN
EXPERIMENT JOURNAL OF HUMANITIES AND SOCIAL
SCIENCES, 7(2):75-81

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