Economic and Business Implications of the Post-Crisis Banking Regulation in the United States and the European Union
Abstract
The recent crisis financial regulation has gone up immensely. The latest Capital Requirements Regulation and Directive, the Bank Recovery and Resolution Directive, and the Dodd-Frank Act are the key tools enacted to tackle the main thorny issue, i.e. too big to fail.
Thus, the reaction from both sides of Atlantic seems to have been akin, thousands of pages calling for the action, i.e. protecting taxpayers' and consumers' money. However, having said that and being aware that the too big fail problem is thought to have brought about the financial crisis, the regulars' reaction thereto was seemed not to have puzzled the issue out.
To the contrary, it has been pointed out by many, that the very response to the crisis, i.e. mergers and acquisitions of unsound banks have spawned groundings for another costly crisis and exacerbated the moral hazard headache since banks have become bigger than ever. The article goes over the main points in the proposed areas in both the United States and the European Union and tries to their, not only financial implications.