Explaining how to avoid the next financial crisis:

A regulatory regime with “teeth”
- You don't need to prevent regulatory arbitrage between many countries
  - Tax havens. Pick safe countries
- go to capital crosses borders to find lightest regulations
- require stricter rules regarding leverage & capital adequacy
  - Or more reserves

Expert Solution

1. Regulatory regime with teeth means "Strong and poweful regulators". This can be understood in the time of financial crisis of 2008 there was a need grown for having a regulator which should be sufficiently powerful to avoid the crisis caused due to poor oversight by current regulators.

2. Regulatory arbitrage means to utilise more favourable laws in one jurisdiction to circumvent less favourable laws of other jurisdiction where laws are quite unfavourable.

3. Capital adequacy means statutory minimum amount of reserves of capital kept by a bank or financial instituion. This amount will be needed to deal with the uncertain times.

Rahul Sunny answered 2 years ago

What could have done the central bank to avoid financial crisis in 2007 ?

How did Singapore fare in the Asian Financial Crisis in 1997 and the Global Financial Crisis...

How did Singapore fare in the Asian Financial Crisis in 1997 and the Global Financial Crisis in 2008 relative to its other ASEAN partners (you may pick any one of them for discussion)?

How does the pending financial crisis because of Covid-19 differ from that of previous financial crisis?

-What is the financial crisis? -Dynamics of financial crises, the stages of crisis -2007/9 financial crisis

name 3 causes of the global financial crisis. how did the choices contribute to the crisis?...

name 3 causes of the global financial crisis. how did the choices contribute to the crisis? were the warning signs evident before the crisis that were ignored? which cause contributed more over the others?

how was the turkish currency economy before financial crisis for the Turkish Currency and Debt Crisis...

how was the turkish currency economy before financial crisis for the Turkish Currency and Debt Crisis 2018 happened

What is meant by a financial crisis? What are sources of a crisis? What is the link between a financial crisis and an economic crisis?

What is meant by a financial crisis? What are sources of a crisis? What is the link between a financial crisis and an economic crisis? What is meant by a contagion effect a financial crisis? How does it spread from one country to another in an open economy?

When responding to a brand crisis it is best to respond quickly and promptly to avoid...

When responding to a brand crisis it is best to respond quickly and promptly to avoid bad press and losing any customers now or later on. Question 1 options: True False Question 2 (2 points) If a company chooses to use current products in current markets it is called ________. Question 2 options: Market Penetration Strategy Boring Diversification Strategy Strategic Question 3 (2 points) If the parent brand is already associated with multiple products through brand extensions, then it may...

Explain the causes and impact of a financial crisis as seen in the Asian Financial Crisis...

Explain the causes and impact of a financial crisis as seen in the Asian Financial Crisis in 1997 and Global Financial Crisis in 2008. As both Singapore and Hong Kong have good banking regulations and are surplus economies in the balance of payments, how do they suffer from contagion effects of the Asian Financial Crisis and what can they do to minimise such effects?

After financial crisis, What is the problem of the compensation policy of financial dindustry and how...

After financial crisis, What is the problem of the compensation policy of financial dindustry and how they improved?

Question