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DQ 1 After viewing The Crisis of Credit Visualized video, respond to each of the following: 1. How could government regulations have prevented or mitigated the credit crisis of 2008? If government regulations were in place I believe that the issues could have been identified and addressed before it became a crisis. According to Sacasa (2008), “to reduce the risk of crisis and address them when they occur…[there needs to be] (a) a better way to assess systemic risk and prevent its buildup in good times; (b) improve transparency and disclosure of risks being taken by various market participants; (c) expanding the cross-institutional and cross-border scope of regulation while safeguarding constructive diversity; and (d) putting in place mechanisms for more effective, coordinated actions” (para. 1). Regulations would have prevented or mitigated the credit crisis because it would have limited or prevented leveraged financial institutions from taking on excessive risks. I also believe that regulations would have identified the risks associated with fast credit growth, allowing regulators to possibly hinder if not stop banks from engaging in these types of practices. Also, if there had been a policy that placed a stipulation on banks that required them to have a certain amount of capital to cover a certain percentage of their debt may have also served as a prevention or mitigation. 2. Discuss whether too much governmental regulation of business or too little governmental regulation of business presents the greater danger to: a. The greater good b. business Can you imagine living in a world where you have no recourse if a product you purchased caused injury or death to your family member? Can you imagine buying clothes and having to worry more about whether or not the dye that is used in the clothes could cause toxic poisoning? Can you imagine purchasing toys for your child and not knowing if the paint contains lead? Can you imagine not knowing if and when you start your car that it will be engulfed in flames? It is governmental regulations of businesses that prevent and lower the occurrence of these incidences from happening today. Therefore in my opinion too little governmental regulation presents the greater danger to the greater good. Businesses should not be left to regulate themselves because then there’s no recourse for the consumer if they are being treated unfairly or if the business decides to engage in unethical activity. We still see and feel the effects of the once deregulated banking industry; the economic crisis impacted not only the United States but other countries that depend on its economy. According to Seaquist (2012), “every member of society is charged with a duty to act with reasonable care at all times in order to avoid harming others through carelessness” (para. 2). Governmental regulations applies this same charge to businesses and it acts as the checks and balances for the industry. Reference: Chan, S. (2011). Financial Crisis Was Avoidable, Inquiry Finds. Retrieved from http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0 Sacasa, N. (2008). Preventing Future Crises. Retrieved from http://www.imf.org/external/pubs/ft/fandd/2008/12/sacasa.htm Seaquist, G. (2012). Business law for managers. San Diego, CA: Bridgepoint Education, Inc. DQ 2 Some argue that government needs to increase its regulation of business for the good of society as a whole, while others believe that the marketplace is self-regulating and that government intervention through needless regulation places an unfair, costly burden on businesses in general and on small businesses in particular. What role do you believe government regulation should play to ensure ethical conduct by businesses? How do different political viewpoints potentially shape the answer to this question? It is my belief that the government’s role to ensure ethical business conduct is to establish and enforce standards for conducting legitimate activities; and if a business does not comply with set standards they face significant repercussions. Considering that all businesses provide a service to the public there must be regulations in place to protect the consumer. The World Federation of Direct Selling Associates (2010), states that the government “can play an important role in ensuring and promoting ethical business by (1) ensuring product safety, (2) ensure hazard warning and recall, (3) ensure consumers satisfaction, (4) encourage effective and fair competition, (5) reliable after sales service, (6) ensure fair contract deals, (7) provide testing facilities, and (8) ensure availability of redress mechanism” (para. 6). In the early 1930’s the U.S. experienced a massive bank failure after decades upon decades of instability in the 1800s and early 1900s. In order to stabilize the banking system regulations were imposed which resulted in sixty years of calm in the financial sector (Krugman, 2009). This proved that regulation works. It’s only when businesses and institutions find ways to operate outside of these regulations do trouble and turmoil begin. It is preposterous to believe that the marketplace is self-regulating and it is this type of thinking that caused the push for deregulation which began in the 1970s. According to Krugman (2009) “even the regulation that was left in place was, in many cases, not enforced vigorously, and there was little chance of new, substantial regulatory changes being put in place to match the changes in the financial marketplace brought about by rapid financial innovation. In some cases the deregulation went much too far” (para. 2). If your political viewpoint is against government telling you how to run your business then you would be more apt to believe that it is not the role of government to meddle in the business community. I believe that these individuals or businesses will debate that “too much” regulation does not allow businesses to thrive which then impacts earning. Whereas one that embraces regulations will understand that these standard are in place for the protection of the consumer and the business. Reference: Krugman, P. (2009). Self-Regulation Doesn’t Work. Retrieved from http://economistsview.typepad.com/economistsview/2009/04/selfregulation-doesnt-work.html Seaquist, G. (2012). Business Law for Managers. San Diego, CA: Bridgepoint Education, Inc. World Federation of Direct Selling Associates (2010). Information Guide on Code of Conduct for Ethical Business. Retrieved from http://www.wfdsa.org/cepi/ConsumerModule/index.cfm?fa=part3

Tutor Answer

Aussiemathematician
School: UT Austin

Hey dude, the paper is plagiarized only in the questions

Running head: GOVERNMENT REGULATIONS

Government Regulations
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Course
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1

DQ 1 After viewing The Crisis of Credit Visualized video, respond to each of the following:
1. How could government regulations have prevented or mitigated the credit crisis of
2008?
Enactment of government protocols would make the issues to be recognized and be
addressed before they turn out to be a crisis. To lessen the menace of crisis as well as handle
them whenever they take place there ought to be the following; an effective way that examines
risk and also prevents its establishment during good times, enhance transparency as well as
disclosure of hazards that are taken by different market contributors. The other issue is
intensifying the cross-border and cross-institutional scope of a protocol whereas guaranteeing
constructive diversity. The other issue is that there ought to be in place mechanisms for
coordinated and effective actions.
Protocols would have mitigated or prevented the credit predicament because it would have
restrained leveraged fiscal organizations from taking on extra threats. On the other hand...

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Anonymous
Top quality work from this guy! I'll be back!

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