The journey of financing entrepreneurs and innovation: exploring the role of government

Banks are of crucial importance (as stated by Ashraf & Shen (2019); Bloomfield & Steward (2020)) because they play an important role in the economy and the financial system. Banks are responsible for providing loans to businesses and individuals, managing savings and facilitating payments, and have a gatekeeper role when it comes to deterring crime. This makes banks essential to the functioning of the economy. In addition, banks have been exposed to and caused several financial crises in recent years, such as the credit crunch in 2008. These crises have led to an increased focus on the role of banks and the need to better regulate the financial system. Moreover, there role of banks is further impacted by ongoing developments such as digitalisation, the rise of fintech companies, changes in economic structure (such as the energy transition) and changing laws and regulations. All this makes the role of banks a topical and relevant topic for research and discussion. By investigating these developments and their impact on the role of banks, we can contribute to a better understanding of the changing role of banks in today’s economy. In this paper, we explore the question of how the government can regulate and monitor the financial sector to ensure financial stability and protect consumers. We also look at what impact banking regulation has on banks’ original tasks and functions. This is also about the extent to which the government should play a role in stimulating entrepreneurial lending and financing and innovation. Examining the role of government in the financial sector is important to understand how government can contribute to a healthy and stable sustainable financial sector and circular economy.