Financial Accounting Reporting

1248 Words5 Pages
Financial Accounting Reporting Introduction In the last few years, the issue of financial regulations has been increasingly brought to the forefront. This is because of a number of high profile scandals are highlighting how abuses are occurring from the lack of regulation. A good example of this can be seen with adjustable rate mortgages (ARMs). In the early 2000s, this was considered to be an effective way for many low income and minority families to purchase a home. However, as the economy began to slow is when interest rates were reset higher. This resulted in the many of these assets being sold to investors as safe, income orientated securities. (Government Regulations 2008) Yet, once many homeowners began to default on these loans is when the risks became clear (with some of these securities losing up to 100% of their value). This had a negative impact on economic growth and it changed the debate surrounding financial regulations. As a result, these events are illustrating how these guidelines are important in controlling greed and excesses in the economy. (Government Regulations 2008) Regulation vs. Deregulation Since the late 1970s, there has been a focus on deregulation. This is because many entrepreneurs and economists felt that various laws restricted the ability of firms to compete on a global scale. Over the course of time, this hurt the profit margins of firms by restricting their activities. One the biggest proponents' of deregulation is Ronald Regan
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