Questions On Financial Markets : Regulations

1353 Words6 Pages
Stephen Schofield
ECON 2301
6 December 2016
Financial Markets: Regulations
When looking at something as large as the economy, we have to realize that there is always the potential for something to go wrong. This could be something that naturally takes place due to lows and highs in business cycles, or something that is totally unnatural, like human manipulation of the market. Due to things like this we often have to set some type of regulations to keep certain factors of the economy in check. During this paper I will discuss some of the regulation packages that have been introduced in an effort to keep the economy in check. A few of these include the Glass-Steagall Act, the Frank-Dodd Act, and the Volker Rule. Furthermore, we will attempt to answer questions like, how does the Frank-Dodd address the “Too Big to Fail” problem with banks? Do you think the Frank-Dodd Act accomplishes its goal? If not, what might you suggest to correct the issue?
The banking system has changed greatly over the past 100 years, but a lot of the change deals with more strict regulation on what banks are allowed to do. In a time period from 1929 to 1933, the banking system had some problems. Before 1933, banking activities weren’t regulated, so banks could do whatever they wanted to with private money. In 1933 at Franklin Roosevelt’s inauguration he stated that “there must be an end to speculation with other people’s money” (Lopes). By this, he wants banks to stop using the money of private
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