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Why did the financial regulations change the commercial bank ANZ

Why did the financial regulations change the commercial bank ANZ

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The financial crisis in the year 2008 was an "avoidable" disaster that was caused by widespread failures in corporate mismanagement, government regulation, and heedless risk-taking. . The unethical behaviour of the large US banks were at the epicenter of the financial crisis of 2008. The high risk mortgage loans by commercial banks of United States were the fuel that ignited the financial crisis. Rating agencies were paid by investment banks, however had no liabilities if their ratings are proven incorrect. Because of the unethical behaviour of banks the creditors and investors lost trust in these institutions and had primarily concerns over their liquidity and ability to meet short-term liabilities. It created the perfect storm to peplace the old financial regulation. To overcome these concerns the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act on 21s July 2010. The Act created a new systemic risk council to serve as an early system of warning on risk identification in banking and market activities. The Federal Reserve holds the authority to increase the limit to ensure the credit exposure reporting, enhanced public disclosures, concentration limits, and short-term debt limits. The commercial could not take the high risk as they were doing earlier. The regulations created market transparency between banking institutions

Rahul Sunny answered 1 year ago
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