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Regulations? Who Needs Them?

Regulations? Who Needs Them?. What regulations were lifted prior to the financial crisis that caused the crisis to occur? And why were they lifted?. Larson Barkurn & Slade Buckley. Regulations Before the Crisis.

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Regulations? Who Needs Them?

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  1. Regulations? Who Needs Them? What regulations were lifted prior to the financial crisis that caused the crisis to occur? And why were they lifted? Larson Barkurn & Slade Buckley

  2. Regulations Before the Crisis • The Glass-Steagall Act was put in place after the 1929 stock market crash to divide commercial and investment banking to halt banks from gambling with money that wasn’t theirs. • “Glass-Steagall said you are free to take risks if you want, but you do with your own money and you get to keep your own losses” (Quirk). Responsibility for your or your partners actions.

  3. Reasons for Deregulation • With financial markets becoming deregulated they were stealing the “core business” from the commercial banks. Therefore their would be a “strong incentives” for the Glass-Steagall Act to be repealled (Mester). • Not to mention that “underwriting financial securities” is a very “profitable” business to be in (Mester). At the core of all of these decisions is money. • The chance for quick money to be made was undeniable.

  4. Thoreau’s Two Cents • “All machines have their friction; and possibly this does enough good to counterbalance the evil” (Thoreau). Evidently this friction only helped us get to the recession we are in today. Men are all about gaining money regardless of the lasting effect it has on others. Thoreau is right when he says we need government because men aren’t responsible enough to handle their business without. He might have two cents after all but probably not..

  5. Works Cited Mester, Loretta J. “Repealing Glass Steagall: The Past points The Way To The Future.” Business Review (19936):3. Academic Search Premier. Web. 21 Feb 2013. Quirk, William J. “Too Big To Fail and Too Risky To Exist.” American Scholar 81.4 (2012): 31-43. Academic Search Premier. Web. 19 Feb. 2013.

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