Hi, I need help with essay on Critically Evaluate the regulatory failures in the 2007-8 financial crisis and discuss how these failures can be corrected in t. Paper must be at least 4500 words. Please

Hi, I need help with essay on Critically Evaluate the regulatory failures in the 2007-8 financial crisis and discuss how these failures can be corrected in t. Paper must be at least 4500 words. Please, no plagiarized work!

In the absence of limitations on investments, US banks went on an investment spree. But for government intervention, the crisis would have been still persisting though it has not died down. Regulatory failure does not mean regulator caused the loss. The U.S. regulators have woken up to the crisis and offered practicable solutions to avert future crisis due to regulatory failure. The U.K. as major international financial centre has also been affected by the U.S. contagion and has been responsible enough to offer solutions to the regulatory failure by bringing in three more regulators. Introduction The origin of the 2007-08 financial crisis goes to the U.S. where housing mortgage loans were paid to unqualified (sub-prime) borrowers. The loans had been backed by exotic financial products with few tiers highly rated by credit rating agencies. These products were purchased by institutional and banking investors who did so for high yields at low risk. The crisis started when the de-facto borrowers started defaulting all over the U.S. leading to unexpected losses on the front end or back end? products. Chain of bankruptcies, balance sheet write-offs followed. The sub-prime crisis is only a part of the broader picture of debt expansion. In the U.S. for which detailed data is available, total debt as a proportion of GDP increased from 150 % of the GDP in the early 1970s to 330 % in 2005. Household debt also expanded in similar fashion marked by dot.com crash to over 100 % of the GDP by 2008. Financial services which held 10 % of the total increased their share to 30 % between 1975 and 2005. The structural shift towards financial services resulted in huge increase in its profitability from 10 % in early 1980s to 40 % by 2006 (Lewis, 2010, p. 2 &amp. 8). World is not new to financial crises. The U.K. was not immune to the present one since world’s leading institutional and banking investors are spread across the world. It has witnessed a few major crises before for different reasons. The present crisis is due to regulatory failure. This paper examines the causes of regulatory failure and solutions to avert such failures in the future. Regulatory failure Regulatory failure does not mean that financial crisis was caused by regulators or regulations. Rather it was due to short-sightedness of financial institutions and recklessness of the borrowers although there were regulatory strategies that could have averted or mitigated the factors that caused the crisis. For example, five causes are attributed to the crisis of the U.S : 1) Failure of underwriting standards for subprime mortgages and loans to inadequately qualified buyers. 2) parties to the mortgage securitisation process not maintaining market discipline. 3) poor assessment of sub-prime mortgages by credit rating agencies. 4) poor risk management by large financial services institutions. 5) non-response from financial institutions for better risk management as pointed by the U.S. President’s Working Group on Financial Markets. Each of these causes had its own regulatory attribution. Thus, there was no regulatory mechanism for business conduct and consumer protection to control sale of mortgages to homebuyers with poor credit background. Regulators could have by tougher supervisory oversight assisted large financial services institutions for better risk management.