ECON 101 Economic Principles

Select a Government Regulation. Identify a particular government regulation of your choosing that in your opinion has either been successful or a failure. Briefly state the original purpose of this regulation and whether it has changed over time. Then, concisely defend your view on whether you favor the expansion or reduction of the enforcing regulatory agency.

Anti-trust Measures. Identify a particular market that has experienced government anti-trust efforts or you think should have antitrust efforts. Analyze what type of market structure was in existence at the time of the anti-trust measures or is in currently. Then justify whether the market justified(s) the intervention.

Back in 2007, signs of financial crisis started to loom over the US economy, when the prices of real estate started to collapse (Cuvelier et al., 2014). The then US government decided to take financial regulatory reforms to check the collapsing situation of the economy and as the outcome, Dodd-Frank Wall Street Reform came into existing.

Purpose of this regulation – Wall Street reform of the Dodd-Frank was introduced to reduce the recession in the US economy. Some of the major purpose of the Dodd-Frank Act is as follows:

• Systemic Regulation of Risk
• Enhanced regulation of Banking organisations
• Bringing in Pay it Back Act
• Introducing Credit Rating Agencies

Changes over time – Dodd-Frank Wall Street reform has not changed the basic structure of the US financial regulatory organisation but has altered the tax structure of the country (Dimitrov, Palia & Tang, 2015). One of the major changes of this reform was to preventing the flow of Orderly Liquidation Fund to assist the large firms, which are too big to fail.

Performance of enforcing regulatory agency – Federal authority of the US has implemented the government regulation pretty well. Federal Reserve has now extended power to control the cash flow and tax structure has been altered to control the crippling of the economy in any adverse situation (Culp, 2015).

Dodd-Frank Wall Street reform came into existence in order to curtail the collapse of the US economy. This reform step from the US government reduced the dismantling of the crippling US financial companies and renovated the tax structure. To conclude one can envisage that time can only recite whether this reform is potent enough to withstand a major financial setback for the US market like 2008 or not.

References:

Culp, C. L. (2015). OTC-Cleared Derivatives: Benefits, Costs, and Implications of the'Dodd-Frank Wall Street Reform and Consumer Protection Act'.

Cuvelier, J., Van Bockstael, S., Vlassenroot, K., & Iguma, C. (2014). Analyzing the impact of the Dodd-Frank Act on Congolese livelihoods.

Dimitrov, V., Palia, D., & Tang, L. (2015). Impact of the Dodd-Frank act on credit ratings. Journal of Financial Economics, 115(3), 505-520.