International Trade and finance Law Essay Example | Topics and Well Written Essays - 2000 words

International Trade and finance Law - Essay ExampleIn a result of ways, the mortgage industry also suffered, culminating in evictions, cancellations of mortgage programs in the pipeline and light-emitting diode to prolonged joblessness. The meltdown contributed immensely towards the closure of important corporations, decreases in buying power, and massive business losses. The ensuing chaos led to a significant slump in economy leading to recession, with lasting ramifications still being entangle in Europe as evident in Euro Debt crisis. This paper critically analyses whether or non wakeful regulations resulted in the crisis. Many factors have been link up to the financial crisis, with differing priorities being attributed to the possible hunting expeditions. There is consensus, though, that the crisis was the consequence of unjustified coronation in too risky, intricate financial programs1. Conflicts of interest being kept secret, the ineptitude of creed regulators, and the inability of the market to control the stock market are also other contributing factors linked to the crisis. It is notable that the 1999 amendment of the Glass-Steagall Act by the US Congress, successfully removed the thin line which separated investment and depository financial institutions in the country. As a result, it can be argued that honorable mention regulatory bodies and investors did not provide accurate valuation of the risks that mortgage-related pecuniary products could precipitate on the global economy. Equally, governments failed to modify their regulatory regimes to wait the current neo-modern financial economy. Studies on the origin of the meltdown have also been based on the shock of interest rate. Nonetheless, immediately after the crisis erupted, governments responded by enacting palliative pecuniary policies to control the ripple-effect on different stinting sectors. These elaborate self-preservation measures such as the US Dodd-Frank regulatory reforms (20 10) point to the laxity of laws as the principal(prenominal) cause of the crisis. Poor regulations Out-dated regulatory mechanisms arguably left the financial sector to virtually regulate itself, despite the main aim of business organizations being making profit. It was difficult to verify the intentions of the many citizens who had applied for excess credit in an effort to build their families a decent home. This presumed innocence of the investors has turned the heat on bankers who canonical the indiscriminate borrowings2. Banking industry has been an operating under strict laws for a very long time without delay but over time and due to the process of the global economy, the financial services industry whitethorn have been operating under lax regulatory regimes that could not handle rapid economic growth and globalization of the economy. This paper will prove that weak regulations and poor policy decisions played an important portion in in events that led to the crisis. Inst itutional policies left oversight authorities with little to do in terms of making effective responses to crises of this magnitude. Regulations are said to have aggravated the negative impacts of the bubble in the value of homes. The laws and policy decisions that arguably contributed toward the crisis will also be considered. If not, new regulatory mechan