The Global Financial Crisis and The Regulation of Investment Banks

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Lessons of GFC for the regulation of Investment Bank Investment Banks enable individuals, institutions such companies, governments to raise capital by offering underwriting services or working as an agents of the client in offering securities or in both roles. Investments banks play a very important role in stimulating investments in the United States both from individuals and corporate. The global financial environment has over the last decade experienced enough changes as can be witnessed from the key economic indicators. These changes have significantly impacted various stakeholders such as financial markets, money markets, capital markets and the general micro and macro economics players. Countries have been hit by recession and economic meltdowns. The impacts of these changes are different across various countries, trading blocks and regions. Because of these changes, the main risks affecting the global financial system have shifted. For example, the European region which had been affected by the recent Euro Zone crisis has over the last one year experienced positive policy developments and improved economic outlook. In order to mitigate the effects of the current changes and at the same time prepare adequately for any future unexpected changes, the stakeholders in the sector have enacted legislations to guide the contacts of all players. Of all the changes in the financial environment, the global financial Crash of 2008/09 remains the most felled globally across all the sectors of the economy. The global financial crisis started as a crisis in the sub-prime mortgage market in the United States in late 2007. In 2008 the global economic and financial crisis caused recession among the industrialized countries leading to decr... ... middle of paper ... ...nlawful operations or manipulations of their operations as was the case when they were relying on manual operations. Thus the global financial crisis has changed the entire financial industry by putting in place measures to strengthen the financial institutions and at the same time cushion them from any future financial crisis. This has improved the customers’ confidence and has helped to bring the operations of these financial institutions to the normal operational levels. The regulators should keep a keen overview of their operations to ensure they comply with these regulations. References Podoliakova, K, 2012, Impact of the Global Financial Crisis on the Investment Banking Industry, viewed 28th May 2014, < http://iccbif.kbmf.nhf.euba.sk/files/18%20Impact%20of%20the%20Global%20Financial%20Crisis%20on%20the%20Investment%20Banking%20Industry.pdf>

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