Financial Crisis of 2007 – 2009, Was it Preventable? (Coursework Sample)
Prior to the current pandemic, the Financial Crisis of 2007 – 2009 was the worst economic downturn since the Great Depression of the 1930's, and like that event had global repercussions and consequences. Also like the earlier crisis there were significant events that were under the control of policy makers that made the 2008 crisis worse. Among these were lax banking regulations on home loans, a loosening of regulations that had prevented commercial banks from engaging in speculative behavior more typically reserved for investment banks and hedge funds (see also: The London Whale).
Please contribute to our discussion this week by writing on 'whether the crisis could have been prevented or significantly mitigated by better bank supervision'.
ECON 430 Week 4 Discussion: Financial Crisis of 2007 – 2009, was it preventable?
Many people have varying opinions regarding the Financial Crisis of 2007 – 2009. While some argue that it is an unfortunate financial turmoil that was preventable, others opine that such an event was inevitable. The said global crisis is a subject of open debate. The Financial Crisis of 2007 – 2009 is attributable to massive foreign borrowing, unreasonably loose monetary policy, imprudent lending practices, and lack of proper financial regulation (Silver ,2022). Before the crisis, an interesting dichotomy was observed, where finance increasingly became global while its supervision and regulation were nationally controlled and coordinated. Despite national regulation, excessive global imbalances have far-reaching negative implications for the U.S economy.
The crisis resulted from human action and inaction. The leaders in the financial sector and the public stewards of the financial
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