"Financial institution failures are a fact of life and little can be done to stop them": an evaluation of the recent proposals for reform of financial market regulation in the United States and Europe
Table of Contents
1. Introduction p. 1
2. The current financial crisis: origin and development p. 3
3. Proposals for reform of financial markets regulation: the United States p. 4
4. Proposals for reform of financial markets regulation: Europe p. 5
5. The future of financial markets regulation p. 6
6. Conclusions p. 7
The current economic situation, with worldwide markets plunging and an unprecedented credit crunch undermining the future world's economic growth for several years, shows us with clarity how fragile and instable the financial markets can be.
We have been astonished witnesses to the federal rescue of Fannie Mae and Freddie Mac following the sub-prime crisis, the bankruptcy of Lehman Brothers, the sales of Bear Stearns and Merrill Lynch and the takeover of AIG by the U.S.
Federal Reserve to avert its bankruptcy.
Nowadays, under the pressure of the uncertainty and chaos characterizing the global financial markets, the statement "financial institution failures are a fact of life and little can be done to stop them" seems true, more than ever.
We are watching, as Roger Altman correctly pointed out, modern history's greatest regulatory failure.Ã¯Â¿Â½ The globalisation, for a long time, has been analyzed only with refere Roger Altman, "Modern history's greatest regulatory failure", Financial Times, September 17, 2008.nce to the global supply chain for goods and services.
The digital technology shortened the distances between countries and revolutionized the global supply chain, allowing people to engage in business with one another across the globe, with each nation bringing its comparative advantage to the table of world commerce.Ã¯Â¿Â½...