Nobody downloaded yet

Regulation/Deregulation - Essay Example

Comments (0) Cite this document
Summary
Regulation of the financial system actually entails setting up rules and regulations and also establishing an enforcement mechanism that is designed to control the operation of the systems constituent institutions and markets (Macey, 5). The main objectives of regulation are…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
Regulation/Deregulation
Read TextPreview

Extract of sample "Regulation/Deregulation"

Download file to see previous pages Deregulation is basically concerned with reducing and redistributing rents, leading economic players to adjust in turn following this distribution. Unemployment may increase for a certain period while real wages may decrease before recovering. Deregulation put banks and other financial institutions in a situation where they took great risks resulting in their near insolvency. On the other hand, a large number of weak mortgages failed to regulate mortgage brokers (Macey, 14). Despite the fact that deregulation proves to be beneficial to some extent, it also comes along with strong distribution and dynamic effects.
From late 1930’s to the 1960’s, there were regulatory initiatives which constituted microeconomic stabilization (Macey, 3). This system controlled price and competition in all the industries in the country. The federal agencies had extra ordinary powers of shaping most aspects of the market structure in the industries. The main objectives of these federal regulations put were high quality, widely available service, secure contractual arrangements and stable pricing, and indeed they were able to accomplish them. This era was characterized by prosperity, strong economic growth, low inflation rates and low interest rates. The financial system appeared to work well under regulation and its assets quadrupled.
Financial deregulation then followed which went on for several decades prior to the financial crisis. Pre crisis disclosures pertaining off- balance sheet accounting and subsidized home ownership were imperfect (Macey, 6). The relaxation of credit standards and unsound governmental housing policies actually paved way to the crisis. The financial crisis which resulted from deregulation was a culmination of massive U.S. housing bubble which could have been prevented if the right regulatory measures had been employed at the right time. Some of the regulatory failures which led to the crisis are;
With the influx of capital, the Federal Reserve ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Regulation/Deregulation Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Regulation/Deregulation Essay Example | Topics and Well Written Essays - 1250 words. Retrieved from https://studentshare.org/business/1685290-regulationderegulation
(Regulation/Deregulation Essay Example | Topics and Well Written Essays - 1250 Words)
Regulation/Deregulation Essay Example | Topics and Well Written Essays - 1250 Words. https://studentshare.org/business/1685290-regulationderegulation.
“Regulation/Deregulation Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/business/1685290-regulationderegulation.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Regulation/Deregulation

Deregulation of Airline Industry

...? Topic: Deregulation of Airline Industry Deregulation in the airline industry was aimed at maximizing the benefits that the customers would derive from elimination of regulation by the government; the move by the congress to formulate the airline deregulation act of 1978 to liberalize the airline industry was to encourage establishments of other airlines in the industry. Previously before the deregulation act the Civil Aeronautics Board (CBA) was responsible of regulating the airline industry. The CBA regulated prices charged by the airlines for the services they offered, the entry of airlines in the industry, that is...
5 Pages(1250 words)Essay

Homer and Achilles

4 Pages(1000 words)Essay

Ethics adn the regulation and deregulation of energy

...In the United s, the electrical and natural gas industries have found themselves undergoing developments of change in the way they supply their resources. Millions of households and businesses within the 24 different States which have enacted deregulation plans find themselves torn in two from what is the falling of the $220 billion electricity industry; that being one of the last government sanctioned monopolies. The deregulation of both markets has applied extreme pressure on both industries to act more efficiently. This drive in efficiency has then directly impacted more of a commitment from the two industries to establish further safety procedures and increased attention...
3 Pages(750 words)Essay

Deregulation of energy

...by consumers and businesses? ii. What is the impact of deregulation on production cost? iii. How has deregulation affected imports and the US balance of trade figures 2.0 Literature Review 2.1 Deregulation explained Hammond and Knott (1986) while looking at deregulation in the financial industry indicated that although theories relating to regulation do not always focus on the same types of variables, researchers indicate that many of them reproduce the same effects – once they have been initiated they are difficult to eliminate and it is almost inevitably leads to more regulation. However, Hammond and Knott (1986) indicate that these...
8 Pages(2000 words)Research Paper

ASSESS THE VIEW THAT REFORMING THE REGULATION OF PRIVATE SECURITY INDUSTRY IS USELESS, WHAT IS REQUIRED IS DEREGULATION

...The Bane of Deregulation: The Private Security Industry Experience As early as the proposal that the Security Industry ity (SIA), United Kingdoms agency tasked to regulate the countrys bourgeoning private security sector be scrapped has already been floated around. This year, the proposal seemed to gather steam as the Home Office scramble to curb government spending. The Home Office, in a report by the BBC, explained that, "the government is committed to making substantial reforms of its public bodies to increase accountability and reduce their number and cost" (Campbell 2010). The idea is that such move is already feasible, timely and appropriate since the industry has supposedly reached a degree of...
6 Pages(1500 words)Essay

Ocean regulation and deregulation

... The movements that exist today to economically reregulate transportation modes are such as the re-regulatory movement ofWashington that imposes the need to impose discipline on the financial services of the transportation modes. The federal maritime commission also reregulates the ocean transportation modes. The federal maritime commission sets up a regulatory apparatus that is new (David 27). For a long time economists have pressed deregulation in the shipping industry after studies showed constant returns to scale and losses resulting from regulation. The aim of deregulation has always been to reduce the constraints that are imposed by the government on the ocean transport sector. Deregulation aims at creating conditions... that are...
1 Pages(250 words)Research Paper

Deregulation

...Deregulation Deregulation Deregulation involves the reduction in the role that the government plays in business control and thus creating businesses and markets that are freer, in other words, removing set regulations. The argument is that deregulation creates competitiveness and improves productivity. Arguments against it state reasons such as environmental preservation, reduction or control over monopolies, as well as prize standardization. Transportation, energy, finance, and communication are areas that have faced deregulation over time in different states. The federal civil aeronautics board (CAB) regulated all airline services for flights without the states (but not within) controlling the fares, travel times and even routes... . They...
1 Pages(250 words)Essay

Effects of Regulation/Deregulation in the Recent Financial Crisis

...Effects of Regulation/Deregulation in the Recent Financial Crisis In the of their operations, financial institutions are subject to some governing rules and regulations by an established body. The regulation of the financial system involves setting rules and establishing an enforcement mechanism that has been designed to control the operations of the financial system’s constituent institutions, markets, and instruments. Among the various forms of regulations that are instituted include antitrust enforcement, conflict rules, capital standards, asset restrictions, disclosure rules, interest rate ceilings, geographic and product line entries, investing and...
6 Pages(1500 words)Assignment

Airline Deregulation

...Airline Deregulation Insert Insert The five components of force measure that affected the airline industry after deregulation include: Threat of new entrant With the new act in place, many companies joined the airline industries posing a significant threat to the original airlines such as the United Airlines and the American Airlines (Argyres & McGahan, 2002). Which were there and had dominated the market forcing a shift in price change, small profits, more competition, more option for the customers, there the carriers had to increase the quality of services offered. Threat of substitute products and services The new entrant such as us air Airlines, Northwest, Continental and Southwest to mention but...
3 Pages(750 words)Essay

Effect of Regulation/Deregulation

...Effect of Regulation/Deregulation on the Recent Financial_Crisis Introduction There is a direct relationship between the government regulation/deregulation with the recent 2008 United States financial crisis. The paper delves on the effect of government regulation/deregulation on the 2008 financial crisis. The paper focuses on the benefits and disadvantages of the government regulation/deregulation on the 2008 financial crisis. Government Regulation/Deregulation and the Financial Crisis Mr.E. Glaeser’s research showed that the 1994 Interstate_Banking and...
7 Pages(1750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Regulation/Deregulation for FREE!

Contact Us