The Aftermath Of The 2008 Financial Crisis - 1274 Words

In the aftermath of the 2008 financial crisis, Congress recognized the need to regulate nonbank institutions. Many of the financially distressed institutions were not regulated by the same standards bank holdings were. As a result The Financial Stability Oversight Committee was created under Title I of the Dobb-Frank Wall Street Reform and Consumer Protection Act. The committee was signed into law by Barack Obama on July 21, 2010 and serves three primary purposes. One is to authorize and determine nonbank financial institutions that if under material financial distress or failure, can threaten the financial stability of the United States. The designated institutions are referred to as systematically important financial institutions (SIFIs) and are subject to the regulation and supervision of the Federal Reserve System (Board of Governors). Another purpose of the committee is to promote market discipline and eliminate the expectation of companies stakeholder’s relying on the U. S. government bailout as safeguard from failure or loss. Last but not least the committee is also expected to recommend standards and safeguards for U.S. and global financial systems. In the executive summary of the 2014/15 annual reports, the committee continues focusing on three areas of financial risk: cyber security, foreign markets and the housing finance reform. CYBER SECURITY Cyber security is defined as a collection of tools, guidelines and risk management approaches to protect anShow MoreRelatedToo Big to Fail: The 2008 World Financial Crisis and Its Aftermath1779 Words   |  7 Pagesï » ¿ Too big to fail: The 2008 world financial crisis and its aftermath The 2008 world financial crisis begin the banking and housing sector, but spread like a contagion through the entire economy. Many date the beginnings of the problems far back before 2008, back to the historically low interest rates put into place by the Federal Reserve in the wake of the last financial crisis. 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