The Wave of Corporate and Political Changes Since the Early 2000's

875 Words Feb 2nd, 2018 4 Pages
The events which had more severe implications are the huge corporate collapses such as Enron which pointed out the issues linked to fraudulent earnings manipulation and the financial crisis of 2008. When it comes to political events, 9/11 has so far been the most devastating one. All these events and the wave of changes that they triggered represent a new set of challenging issues which regulators have to face and deal with.
During the financial crisis, the banking system was on the verge of collapsing. This highlighted the fact that banking regulations were not strict enough, thus coming up with new banking regulations which were strong and up to date in order to prevent another downfall became a major issue for regulators. The issues mostly revolve around identifying loopholes which caused the system to collapse. For example, under the mark-to-market based accounting system, banks might be short term focused, hence, a strong incentive to underestimate risks. Thus, regulators face the issue of ensuring that accounting frameworks are amended in such a way that they make provision and cater for the possibility of future losses arising.
In the wake of the crisis, governments across the world were forced to step in and bail out many of their banks. This emphasised another issue which regulators have to face due to…
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