One of the great revelations of the Great Recession was the exposure of the %u20
ID: 1177413 • Letter: O
Question
One of the great revelations of the Great Recession was the exposure of the %u201CShadow Banking System%u201D. This shadow system developed over many years outside existing banking regulations that have been in place since the Great Depression. Further the Glass Steagall act was repealed in the 90%u2019s. This law prohibited joining their high risk activities with their commercial banking operations. These banking rules and regulations worked well for most of the 20th century to prevent banks from investing investors%u2019 funds in highly speculative and risky financial vehicles to increase their profits.
New rules, in the Dodd Frank Act, to restore and update the regulation of banks to prevent another financial crash that occurred in 2007 and 2008 and lead to our current economic conditions have been passed. However, congress continues to discuss the enactment of the new rules with some claiming that the recession was an aberration and those saying that it was not and further that it will happen again unless we bring the %u201CShadow Banking System%u201D under some reasonable rules of conduct.
What do think the optimum way to proceed might be?
Explanation / Answer
To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
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