Based on the article above and using other(a) applicable real-life examples, comment on the following statement: to a greater extent principle is better than less. 2.1 Introduction In this era of globalization, fiscal crises tally it more frequently than in the past. From The keen Depression in 1930s, Subprime Loan Crisis, Asian Crisis 1997 until now the europium Crisis is still happening. more(prenominal) regulations often demanded after occurrence of economic problems that faculty founder been foreseeed. In a recent research as shown as below, most of the countries think that more regulations are requisite crossways all industries (Ritholtz, 2012). Poorly functioning banking systems discouraging economic growth, maddening poverty and destabilizing economies. For example, both Spain and Ireland have experienced consuming recessions that were caused by ineffective bank regulation (Norris, 2012). Therefore, instant actions moldiness be carried out in terms of legis lation and regulation to make sure that a nonher severe banking crisis will not happens over again (Tamny, 2010). However, we can often hear that great deal arguing whether thither are insufficient or as well as many regulations that results in a frequent occurrence of fiscal crises. Source: Norris, 2012, yearly Edelman Survey. 2.
2 Protecting Investors Regulations are meant to harbor investors because there is always problem of asymmetric nurture. For instance, investors whitethorn not have readily gettable and updated information as compared to financial institutions. This is because other than past information and publicly in stock(predicate) information, financial institutions are able to get to to insider information ! which is not available to the public investors. Well-informed banks may try to dump securities on or shift their pretend to ill-informed investors in order to sanction firms with outstanding loans (Barth et.al, 2001). Therefore, there must be regulation enforce on banking sector to prevent adverse survival of the fittest and good hazard happens. Adverse selection happens...If you want to get a full essay, order it on our website: OrderEssay.net
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