Regulatory Reforms in the US - Essay Example

Hi how is everything with the assignment? I would be grateful if you could please clarify confusions I have with the assignment 1st draft: please see my comments below please: No reference for (Roberts, 2010). Included. New paragraph for quote needed? You may create a new paragraph, of course, if you so wish, although it is not necessary. They pursue the same theme and idea. liberal economists to private-interest politics (Shughart, 1988; Macey, 1984). “The public-interest arguments for the separation of commercial and investment banking are weak and appear unable to explain the passage of the Banking Act” (Tabarrok, 1998, p. 16). No reference for “too-large-to-fail” “Too large to fail” is an expression, not a quotation. It is the commonly used term in the media for banks that have grown too big for the government to allow them to fail because too many people will be affected adversely. I’ll just remove the quotation marks. These very large banks were considered “too-large-to-fail” (reference?)because of the substantial public interest involved in their continued operation, and thus it was generally taken for granted that government will bail them out. Coupled with this is the “shift towards more self-regulatory rules that permitted US investment banks to increase leverage and reduce diversification under pressure of competition” (Coffee, 2009, p.1). No reference “functional regulators” or is there no need to? GAO is the source of the phrase. Its inclusion within the same sentence as having expressed the idea, then followed by another citation at the end of the paragraph, are sufficient. A concern expressed by the US Government Accountability Office (GAO) is that while the different activities were allowed within the same bank, they remained subject to “functional regulators” (***reference***)where federal authorities (such as the SEC or CFTC) had jurisdiction over specific financial products or services. This resulted in multiple regulators overseeing different business lines within a single institution, and obscured the lines demarcating their areas and making regulation more difficult (US GAO, 2009). Regulatory reforms in the US Should Clarification on Dodd be made? Or there is no need to? Well, this is the only bill currently passing Congres. Having to clarify it will waste wordcount which we don’t have. I’ll just replace Dodd with the word “proposed”. In the US, the origin of the 2008 subprime market crisis, reforms being sought are incorporated in the Dodd(?)banking reform bill that has been passed by the House of Representatives and which is being considered in the Senate. is there grammar correct on the following? Yes, these are parts of an enumeration. We could put them as bulleted phrases, but some profs don’t want the paragraph form disturbed in the case of essays, so they don’t want bulleting. and the Treasury, which currently share regulatory function; designation of new powers to the BoE 6th page Reference for Keynesian and Hayek ? Keynesian and Hayek are staple cornerstone theories, named after their originators, much like Adam Smith and “Wealth of Nations”. Economists take them as established. Appendix A does not refer to them but to the dilemma of regulators. I can’t imagine your prof would not know Keynes and Hayek, they are usually referred to without citation because they are like the Plato and Aristotle of economics, only at opposite ends. I’m trying to avoid putting too many references to avoid using up the wordcount for them, but since you wish then I will put one. at the moment is is appendix A.....it needs to be a reference, should it be US Government Accountability Office, 2009, p. 17?????? A structural change in financial markets The financial crisis and the reforms being proposed to address it had fuelled renewed debate among Keynesian and Hayek economists. Keynesian economics calls for tighter government intervention, while Hayek’s principles stress the absence of intervention in the dynamics of market forces. The new reforms appear to lean towards Keynes, although the intricacies of regulation pose special challenges that increase with increasing regulatory procedures (Appendix A). Dashes needed in between words? This is a phrase taken as an adjective, so the words were hyphenated. BTW, it also aids in reducing the word count because it just gets counted as one world. I just changed the word, then, to “near-perfect”). close-as-possible-to-perfect which reference should be used? Ely, 2009; or Roberts, 2010 or Both? It is helpful to use both, to strengthen the idea; this is to show that both authors used the same idea, so there is agreement. But if it bothers you, though it should not, you may take one out. Either will do. The failure of regulation at this stage is that it allowed the “Big Three” CRAs’s services, as well as the “Big Four” CPA firms’ investment advisories, to be paid by the issuer of the security (Ely, 2009; Roberts, 2010).**** Should there be a gap in APR2009 for the reference below ? That was how EBSCO presented it. Gap or no gap, it’s the same. I just put in a gap to make you more comfortable. Coffee Jr, J C 2009 “What went wrong? An initial inquiry into the causes of the 2008 financial crisis”, Journal of Corporate Law Studies, Apr2009, Vol. 9 Issue 1, p1-22 and also for Winter2009 ? Calomiris, C W 2009 “Financial innovation, regulation, and reform”, CATO Journal, Winter2009, Vol. 29 Issue 1, p65-91 Incomplete reference Not incomplete, too much. Came from EBSCO citation. I cut out the part not needed based on Harvard. Ely, B 2009 “Bad Rules produce bad outcomes: Underlying public-policy causes of the U.S. financial crisis”, CATO Journal, Winter2009, Vol. 29 Issue 1, p93-114, 22p, 3 Graphs; (AN Is this a Book? It’s a document, which was accessed from EBSCO. I see it is already available over the net. I am including the link now in the references. Gieve, J 2008 Learning from the Financial Crisis, Speech given before the European Business School, London Hi, file 1 is very important, you have already read it, but it contains vital information on the assignment for example: Yes, these are the reasons the essay was framed around the economic concepts of Keynes and Hayek. Hayek was for free market forces, Keynes was for government intervention. That is the main push of the essay, the role of government through regulation, and if this is going to interfere with free market forces. I believe competition is not the central theme, because we are talking of survival in a crisis. The winning competitor in a crisis is the entity that survives. Remember that we have only 1,500 words allowed, which is not really very much to work with. We just have to choose the issues carefully but we cannot possibly include all possible angles, or else we will end up with a full-blown dissertation. The prof wants to concentrate on a specific window, which we tried to deliver: failure of regulation in causing the crisis, new regulation that is being proposed. Thus, much as I wanted to include Greece, the problem with Greece is internal to the country (it relied too much on debt) and is not part of the contagion of the economic crisis. I view it as a failure of government policy, not really of regulation. If we introduce Greece, the paper will become longer in having to embark on new explanations. Assignment 2 What case can be made that it was the lack of regulation of the banking sector that led to the financial crisis of 2008-9? What are the new regulatory structures that are being proposed in the US and UK? Word limit 1500 words maximum (strict limit) Guidance for the essay. Remember this is supposed to be an economics essay. Many students in their first assignment used journalistic language since they are often using this as their source reading. Try to frame your essay within an economic model or at least major economic concepts. Think about the essay initially in terms of an S-C-P model, and then use ideas in Industrial Economics like concentration, barriers to entry, deregulated markets, the presence or absence of regulatory authorities, economies of scale and so forth. Centre your essay around economic concepts. Avoid exaggerated language and adjectives (as used in the press and news). Remember there is no time for vague, imprecise introductions (what I call waffle). At some point you are going to have to understand and comment on the dismantling of the Glass-Steagall Act and grasp what was driving the move towards deregulation. Those students who gain higher marks will do so because, in addition to the above, they will understand something of the extraordinary risk that developed in the emerging financial system of the 1990s and 2000s. I gave an open lecture on the economic crisis and recession on the 24trh March. It concerned the banking crisis and will be very important for your assignment Plagiarism is a strict policy and I am sure you all know how strict I am on this. .....you can find more from file 1 and 2 Thanks Attached file: [Send Reply] 64 From: Customer to Writer Date: 2010-05-02 01:47 Subject: final assignment submission time Status: New Hi, is there any problem with time left to submit the final assignment? Would you be able to submit the final assignment in 18 hours time from now? However if necessary you could submit the final assignment Sunday night? However If the assignment can still be improved, you could send it on monday morning 6am english time, the final submission time is 12pm for me to hand in on Monday. I really need the assignment to be perfect and best it possibly can be, I would be grateful if you could let me know when you would send the final assignment. Thanking You Attached file: [Send Reply] 63 From: Customer to Writer Date: 2010-05-02 01:41 Subject: Readings (final readings) Status: New Hi writer I hope you are well, what do think of the readings I had sent yesterday to you? Please find below of links to reading which I have not sent to you before: on Debt levels UK debt levels compared internationally http://news.bbc.co.uk/1/hi/business/8415703.stm Greece votes for big budget cuts to reduce debt _DEc 24th 09 http://news.bbc.co.uk/1/hi/business/8428180.stm UK http://cluaran.free.fr/debt.html Government budget deficts - global comparison http://news.bbc.co.uk/1/hi/business/8214272.stm French public debt in new high after stimulus spending http://news.bbc.co.uk/1/hi/business/8434545.stm Public sector borrowing hits record high _dec 2009 http://news.bbc.co.uk/1/hi/business/8420049.stm Quantitative easing explained http://news.bbc.co.uk/1/hi/business/7924506.stm Deriviative markets and lack of regulation derivatives Peston dec 09 All that the Treasury trots out are the same old stats showing the exponential growth of financial transactions in recent years. For example, it mentions that the outstanding gross value of over-the-counter derivatives rose from less than $100 trillion dollars in 1998 to almost $700 trillion in 2008 (or more than 10 times the value of everything the world produces per annum). Now its not ludicrous to conclude that a big chunk of those transactions were either designed to transfer wealth in a sophisticated gull from naïve investors to clever bankers, or to avoid tax, or to manufacture fees out of products with no serious underlying purpose. It is also arguable that a proportion of those deals have not had a net smoothing effect on markets as a whole but have increased the volatility of share prices, and commodity prices and debt prices - in a way that may actually have damaged the interests of genuine wealth creating companies in the real economy, by making it harder for them to plan. But although such intuitions may be reasonable, intuitions are no basis for levying a new tax. BBC - Pestons Picks: Were all bankers now http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/12/were_all_bankers_now.html Greek credit ratings - dec 09 http://news.bbc.co.uk/1/hi/world/europe/8404861.stm UK government borrowing hits £15.7bn for December http://news.bbc.co.uk/1/hi/business/8472229.stm Economists urge swift action to reduce budget deficit -feb 2010 http://news.bbc.co.uk/1/hi/business/8514767.stm UK debt disaster - march 2010 http://www.moneyandmarkets.com/brits-pounded-as-debts-deficits-hit-home-next-up-us-4-38162 Goldman defends Greece debt swaps - feb 2010 http://news.bbc.co.uk/1/hi/business/8529111.stm Fiscal reduction? http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/02/fiscal_reductio_ad_absurdum.html Economists back delay on government spending cuts http://news.bbc.co.uk/1/hi/business/8523034.stm The cost of protecting UK savers during the credit crisis- £21bn compensation http://news.bbc.co.uk/1/hi/business/8179096.stm UK borrowing hits record £163.4bn -april 22 2010 http://news.bbc.co.uk/1/hi/business/8636701.stm Hidden privaTE UK debts amount to millions http://news.bbc.co.uk/1/hi/business/8640611.stm Have we become a nation of savers? 2010 http://news.bbc.co.uk/1/hi/business/8212941.stm Further Reading(I may already have sent these two files?) banking crisis-debt_recession http://news.bbc.co.uk/1/hi/business/8249411.stm UK inflation rate rises to 3.4% - april 2010 http://news.bbc.co.uk/1/hi/business/8631532.stm Further reading material: please see the text below: Eurozone and its problems _2010 This is from my professor: Eurozone and its problems _2010 (Milton Friedman offered an insightful look at the flaws of a single currency.) Ill paraphrase four of Friedmans statements and follow each with how its playing out: A one-size fits all monetary policy doesnt give the member countries the flexibility needed to stimulate their economies. The European Central Banks mandate is inflation targeting, not growth. A premature exit from easy money policies could drive weaker European countries further into recession. A fractured fiscal policy forced to adhere to rigid EU rules doesnt enable member governments to navigate their country-specific problems, such as deficit spending and public works projects. A majority of the sixteen countries in the monetary union have completely disregarded the EUs Stability and Growth Pact by running excessive deficits. Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors. The cornerstone of the euro, Germany, has rejected the notion of big spending to bail-out troubled countries. And German citizens are in a protectionist mode. A common currency can act as handcuffs in perilous times. Exchange rates can be used as a tool to revalue debt and improve competitiveness of ones economy. Under the euro, weak member countries are helpless. Italy has a history of competitive devaluations of the lira during sour times. Now, in the euro regime, its economy is left flapping in the wind. Today, the most challenging issue facing the euro might be addressed in this statement by Friedman: "Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity." Milton Friedman saw the vulnerability of this single currency concept coming and predicted the euros demise within a decade. While the euro has outlasted that prediction, if a sovereign debt crisis defines 2010, look for the viability of the euro to come under attack again. Attached file: [Send Reply] ---------------------------------------------- 62 From: Writer to Customer Date: 2010-05-01 20:57 Subject: Re: Re: OK Status: Message read | Hi writer, were there more bbc sites used than mentioned on the reference? I only ask because most of my links/reading material were from www.bbc.co.uk | | thank you Hi! Yes, I picked up a lot from the bbc sites, but I only took notes and cues from them. Then I looked for other reading materials, in journals and books, on the same topic, and quoted those. Remember your prof said not to make it sound journalistic. Quoting the bbc news would of courge be journalistic, because these are journalistic articles. But I looked at the direction the discussions in these news were centered on, and looked for their economic theory basis. That is what your prof wants to see. :) Attached file: Writers message 61 From: Customer to Writer Date: 2010-05-01 07:27 Subject: Reading Material receieved today Status: Message read Hi my professor had today sent the following reading materials (latest) I would be grateful if you could please examine these readings, Goldman Sachs facing criminal charges - APRIL 30 2010 Surprise surprise! http://news.bbc.co.uk/1/hi/business/10092972.stm Latest news on proposed reforms READ ALL ABOUT IT http://news.bbc.co.uk/1/hi/business/8652349.stm US Senate begins debate on new Wall Street regulations http://news.bbc.co.uk/1/hi/business/8633455.stm IMF proposes two big new bank taxes to fund bail-outs Further important links(most new below) http://news.bbc.co.uk/1/hi/business/8645945.stm http://news.bbc.co.uk/1/hi/uk_politics/8620772.stm http://news.bbc.co.uk/1/hi/uk_politics/election_2010/8620266.stm http://news.bbc.co.uk/1/hi/uk_politics/election_2010/8619433.stm President Obama attacks critics of bank reform bill http://news.bbc.co.uk/1/hi/business/8636774.stm http://news.bbc.co.uk/1/hi/business/8638016.stm http://news.bbc.co.uk/1/hi/business/8644952.stm http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/04/goldman_v_the_us_senate.html http://news.bbc.co.uk/1/hi/business/8273808.stm http://www.huffingtonpost.com/2010/03/10/richard-blumenthal-connec_n_493476.html http://news.bbc.co.uk/1/hi/business/8636774.stm http://news.bbc.co.uk/1/hi/business/8633455.stm http://fcic.gov/ Read More