As a result of the financial crisis in 2008, new legislation was passed and regulatory requirements placed on financial institutions. Assess the effectiveness of regulatory requirements as a means to reducing investment risk, suggesting alternative solutions to regulation. Provide support for your conclusion.
Thank you for the opportunity to help you with your question!
Financial Institutions and Risk
will prefer to consider the example of JP Morgan chase and Bear Stearns. JP
Morgan Chase has maximum acquire the organization in a deal broken federally. The
main issues behind this were market having subprime mortgage. . The main issue with
Bear Stearns is that they were out of cash and wouldn’t be capable to carry on
their business. Bear Stearns was affected by heavy amount of asset-backed
securities. This caused to increase in financial harm over the upcoming period
of 2 years, instead of backing out; Bear Stearns carries its disclosure in market
with subprime mortgage. In year 2007, the collateralized loan of organization
raise up-to $3.2 billion to manage credit fund. In the July end, it reveals
that two funds of subprime hedge had mislaid all its value which results in year
The problems were that the organizations doesn’t revealed
its real financial position because their distress that it will harm their status.
In certain cases, some organizations even delivered false or altered documentation
to maximize the presence of their financial postion.
Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 5th, 2015
Please reply me if you need help with your other Accounting & Finance Homework.
Oct 5th, 2015
Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.