Understanding Issues Facing Corporate Finance (Term Paper Sample)

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Understanding Issues Facing Corporate Finance
Currently, corporate finance is experiencing many challenges with legal and regulatory issues being on the list. No doubt that the financial systems are undergoing tremendous change (including emerging new types of finances). According to Chen et al., (2018), the regulatory framework has greatly affected the financial sector especially because it’s unable to keep pace with emerging technology and innovation in financial markets (Jiang & Yuan, 2018). Indeed, critics of the financial crisis have asked the governments and relevant bodies to update the regulations and ensure that enforcement is done properly. While the regulatory system is a good thing for business, because it helps in quality improvement, manages the unfair competition, and helps in standardizing transactions, compliance has remained a major challenge. The regulatory system is in a state of paranoia and they are treating their customers as villains until they prove with reasonable evidence that their business is innocent and are operating within the law. As a result, it takes a long time, sometimes weeks, to even open a bank account. (Goldstein & Hackbarth, 2014)
Consequently, the regulation system has dampened business flexibility. Additionally, it has erected barriers to entry and has caused innovation retardation (Jiang & Yuan, 2018). When innovation is retarded, creativity in business is also limited. Business transactions among other factors such as risk, reporting, and treasury management have been stuck for a long time. That translates into standardizing homogeneous services and products that have low volume hurdles and may take years to create an even activate. However, some may argue that the corporate finance environment is not that bad, and