Do we have too many regulations to avoid another great recession?

Expert Solution

Great recession often comes when no enough regulations are put up to control crisis at nascent stage. The great economic depression of 1929 was caused by the lack of any control by the government and minimal role of Federal Reserve. Such crisis could have been avoided had there been larger role of Federal Reserve.

Similarly, in 2008-09, banking regulations were not strong enough check in deteriorating quality of financial assets. Lack of capitalization and liquidity led to the chaos in financial sector.

Dodd-Frank financial sector reforms is landmark actions and it would help to avoid the instances of liquidity and assets crunch. it stresses upon the maintaining capitalisation and liquidity.

Further, Basel III norms helped significantly to reduce the severely of crisis in European countries.

To sum up, there have come up many regulations and role of central bank also has become more internalised Thus, it is expected that next crisis would not be too severe and profound.

Rahul Sunny answered 1 year ago

What is the Bank Regulations during 2007-2009 ( Great Recession ) ?

What is the Bank Regulations during 2007-2009 ( Great Recession ) ?GIVE DEFINITIONS ABOUT ALL OF THESE TERMS:TARP; HERA; Federal Housing Finance; Regulatory Reform Act of 2008; HOPE for homeowners act of 2008; SAFE Secure and Fair Enforcement for Mortgage Licesing Act of 2008; Forecosure Prevention Act of 2008 and FHA Modernization 2008; Emergency Economic Stabilization Act of 2008; Helping Families Ave Their Homes Act of 2008.

In 2008-2009, during the Great Recession, banks found themselves with too little capital and many became...

In 2008-2009, during the Great Recession, banks found themselves with too little capital and many became insolvent. Briefly explain why this occurred. Make sure you use proper terminology and support your answer by commenting on the changes in banks' assets, liabilities, and capital that occurred during that time. Note: if you choose Option 1, make sure that a thorough explanation is provided regarding changes in the banks' liabilities and particularly assets and capital. The DQ will be graded according to...

Discuss the many parallels between the Great Depression and the Great Recession.

briefly describe your experience with HIPAA privacy or security regulations. Do you think too many or...

briefly describe your experience with HIPAA privacy or security regulations. Do you think too many or not enough resources are devoted to protecting health information? Why or why not? Explain fully. please 300 words

In Chapter 14 we adopt the AS/AD model to study the Great Recession and the Great...

In Chapter 14 we adopt the AS/AD model to study the Great Recession and the Great Depression. What are the shortcomings of the AS/AD model in explaining the two episodes of recession? Briefly explain. (10 pts)

How do we officially define a recession? A recovery? Who defines them? How many recessions have...

How do we officially define a recession? A recovery? Who defines them? How many recessions have occurred in the USA since 1945?

We have experienced the so called “great-recession.” Indicate if Marx’s “law of motion” of capitalism can...

We have experienced the so called “great-recession.” Indicate if Marx’s “law of motion” of capitalism can or cannot explain what lead to the “great recession.” If you on the other hand think that some but not all of the laws apply indicate which ones do and which do not. Give examples to support your assertions.

The mortgage foreclosure crisis that preceded the Great Recession impacted the U.S. economy in many ways,...

The mortgage foreclosure crisis that preceded the Great Recession impacted the U.S. economy in many ways, but it also impacted the foreclosure process itself as community activists better learned how to delay foreclosure, and lenders became more wary of filing faulty documentation. Suppose the duration of the eight most recent foreclosures filed in the city of Boston (from the beginning of foreclosure proceedings to the filing of the foreclosure deed, transferring the property) has been 230 days, 420 days, 340...

the Tuskegee Syphilis Study What experimental safeguards do we have now to avoid these situations? If...

the Tuskegee Syphilis Study What experimental safeguards do we have now to avoid these situations? If we applied our 7 step decision making process to these situations, what would have been the outcome?

Do those accused of crimes have too many protections? Should victims of crimes have more rights?...

Do those accused of crimes have too many protections? Should victims of crimes have more rights? If so, what should some of those rights be? Discuss how the Fourth, Fifth, Sixth, and Eighth Amendments protect criminals, but no amendments protect victims. Point out how, in criminal cases, the victims aren’t even parties to the action; they are merely witnesses for the prosecution. Is this wrong? Should this system be changed?

Question