Enforcement of Laws and Regulations
Many existing laws and regulations were not effectively enforced prior to the crisis. The SEC was criticized for relaxing investment bank oversight and requiring inadequate risk disclosures by banks. The FDIC allowed banks to shift large amounts of liabilities off-balance sheet, thereby circumventing depository banking capital requirements. The Federal Reserve was criticized for not properly monitoring the quality of mortgage originations. Once the crisis hit its critical stage in September 2008, the regulators did not consistently apply remedies available to them, thereby increasing uncertainty. A primary example was allowing the demise of investment bank Lehman Brothers in September 2008, despite the Fed and Treasury Department facilitating a rescue/merger for Bear-Stearns in March 2008 and the Merrill-Lynch merger with Bank of America in September 2008.
Read more about this topic: Government Policies And The Subprime Mortgage Crisis
Famous quotes containing the words laws and/or regulations:
“The more we learn of science, the more we see that its wonderful mysteries are all explained by a few simple laws so connected together and so dependent upon each other, that we see the same mind animating them all.”
—Olympia Brown (1835–1900)
“If the veil were withdrawn from the sanctuary of domestic life, and man could look upon the fear, the loathing, the detestations which his tyranny and reckless gratification of self has caused to take the place of confiding love, which placed a woman in his power, he would shudder at the hideous wrong of the present regulations of the domestic abode.”
—Lydia Jane Pierson, U.S. women’s rights activist and corresponding editor of The Woman’s Advocate. The Woman’s Advocate, represented in The Lily, pp. 117-8 (1855-1858 or 1860)