Financial market regulation has consistently appeared in IELTS Writing Task 2 essays, particularly in the past two years. Based on analysis of recent exam patterns, questions about government oversight of financial markets have appeared in approximately 15% of tests, making it a significant topic for preparation.
Similar to discussions about role of government in stock market stability, this theme often explores the balance between free markets and regulation.
Sample Question Analysis
Some people believe that financial markets should operate with complete freedom, while others argue that governments should closely regulate all financial activities. Discuss both views and give your opinion.
This question requires candidates to:
- Examine arguments for and against government regulation
- Present balanced analysis of both perspectives
- Provide a clear personal stance
- Support arguments with relevant examples
Band 8 Sample Essay
The debate over government intervention in financial markets has intensified following various economic crises, similar to discussions about government role in financial crises. While some advocate for complete market freedom, I firmly believe that appropriate government oversight is essential for economic stability.
Proponents of unregulated markets argue that freedom from government interference allows for maximum efficiency and innovation. When markets operate without restrictions, they can respond quickly to changing conditions and allocate resources optimally. For example, the rapid growth of cryptocurrency markets demonstrated how unregulated environments can foster technological innovation and create new economic opportunities.
However, the necessity for government oversight becomes evident when examining historical market failures. The 2008 financial crisis clearly illustrated how insufficient regulation can lead to catastrophic economic consequences. Banks and financial institutions, operating with minimal oversight, engaged in risky behaviors that ultimately threatened the entire global economy. This relates closely to why governments should regulate cryptocurrency markets, where similar risks exist.
In my view, balanced regulation is crucial for maintaining market stability while preserving innovation. Effective oversight can prevent fraud, protect investors, and ensure fair competition without stifling economic growth. For instance, successful regulatory frameworks in countries like Singapore have shown how government supervision can create robust financial markets while maintaining economic dynamism.
Band 6.5 Sample Essay
In today’s world, financial markets are very important for the economy. Some people think these markets should be free from government control, but others want strict regulation. This essay will discuss both ideas.
Those who support free markets say that too many rules can hurt business growth. When governments don’t interfere, companies can make quick decisions and try new things. For example, many successful technology companies started in places with fewer regulations.
On the other hand, government control has some benefits. When there are no rules, some companies might take too many risks or cheat customers. We can see this in the past when banks caused big problems because there weren’t enough rules. Also, government rules can protect small investors from losing their money.
I think the best way is to have some government control but not too much. Countries need rules to keep markets safe, but these rules shouldn’t be too strict. This helps protect people while still letting businesses grow.
Analysis of Band Scores
Band 8 Essay Analysis
- Sophisticated vocabulary: “catastrophic,” “insufficient regulation”
- Complex sentence structures
- Clear organization with well-developed arguments
- Relevant examples and cohesive devices
- Strong position with nuanced analysis
Band 6.5 Essay Analysis
- Simple but clear vocabulary
- Basic sentence structures
- Adequate organization
- Limited range of examples
- Position stated but less developed
Key Vocabulary
- Oversight (n) /ˈəʊvəsaɪt/ – supervision or watchful care
- Regulatory framework (n) /ˌreɡjʊˈleɪtəri ˈfreɪmwɜːk/ – system of regulations and standards
- Market stability (n) /ˈmɑːkɪt stəˈbɪləti/ – steady functioning of financial markets
- Innovation (n) /ˌɪnəˈveɪʃn/ – introduction of new methods or ideas
- Catastrophic (adj) /ˌkætəˈstrɒfɪk/ – involving or causing sudden great damage
For additional practice on financial topics, consider writing about role of financial markets in addressing climate change.
Feel free to share your practice essays in the comments section for feedback and discussion.