Government Regulations on Business' Danger to the Greater Good

Regulation and the Greater Good
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Regulation and the Greater Good
The 2008 credit crisis demonstrated the vulnerabilities of leaving the financial sector to self-regulate with minimal external controls by the government. The absence of robust regulatory measures saw the rise of slack lending values and the emergence of questionable credits that triggered a housing bubble in the nation leading to bankruptcy among investors and lending institutions. The ramifications of this crisis illustrated the need for governmental regulations to avert similar outcomes in the future.
If appropriate government regulations had been in place, they could have prevented the credit crisis in several ways. For instance, they could have monitored the system to highlight the risk of the risky behavior by the banks and investors and warn them of the looming calamity. Growth controls could have moderated the merger processes to avoid illusionary expansion that created false confidence in financial institutions. Government regulations could have prevented ba...