Running head: PREVENTING FUTURE CRISIS

U.S. Government to prevent Financial Crisis for Future

[Name]
[Institutional Affiliation]

FUTURE FINANCIAL CRISIS

U.S. Government to prevent Financial Crisis for Future

Financial secotr of U.S is now the most managed among all the major sectors of
economy, and the case was the same before 2008. Today there is just incomplete
private ownership of our credit system and money; the substantial part of
government monopolizes the money, and with regards to financial and credit
exchanges, it advises underwriters and banks how to do, what to do and when to
do. No big surprises we're totally in a mess; their central planning was a disaster,
wherever attempted, and today there is no sector which is more prone as
compared to the financial sector.

We can't forecast the entire things about future however; we can assess our present strategies. We
can analyze easily about the current recession however, we also learned much in current recession.
In order to prevent such financial recessions banks must handle their loan methods as well as their
credit problem carefully in future. The US government must control their banking strategies which
provide benefit to their monetary management. Also, the government can handle their outsourcing
investment, which influences the nation's employment. Each country must handle their shortfalls,
which can occur more issues in their financial framework. Whatever reasons we face, we need to
avoid same sort of things in near future

FUTURE FINANCIAL CRISIS

The financial administrative proposed some reforms which were projected by their congress in order
to prevent future financial crisis and also to avoid the further worsening of crisis by presenting laws
and regulations overseeing operations in the market of financial sector.

The past crisis has demonstrated that there is basically a need for precise regulation of the financial
system. Such rigorous regulation must meet two major requirements. First, it must prevent the
excessive taking of risks which we already have seen in financial markets in past years and that
caused the formation of price bubbles in assets, it also led the large imbalance in worldwide
economy. In the meantime, it also has to make a domain that is helpful for reasonable development
for economies for the period.
In this market economy, maximizing the interests of shareholders and profits are the managements
first priority. They allow the effective allocation of resources in the economy. But, if a sector like
financial sector is systemic which will help in giving importance to proper function in the economy.
The main problems are of incentives, rules and individual responsibility.

The huge amount of debt-obligations has been traded in between institutions, which is unnoticeable
by government; this made GFC (Global Financial Crisis) so unsure. it is important to protect the
states income basis, which mostly comprises of private and corporate taxes, from evasion. With the
efforts like combining with G20 states will be possible to re-set up the power of decision making over
any boundless capital movement. Evasion of private and corporate tax must be hindered by applying
common standards of accounting. Moreover, it is important to put collecting and immediate pressure
on tax havens and non-cooperative jurisdictions. To track the stream of money, international
legislation which increases transparency of corporate ownership and taxable transaction must be set
up. Governments will then have the ability to battle money laundering and fight tax evasion
effectively.

FUTURE FINANCIAL CRISIS

Retail banking must be separated from investment banking as well as the banks must return back to
private sector with highly profitable and competitive market with couple of barriers to entry. The
legislation in against of teaser rates should be enforced which will permit individuals to judge the
affordability of mortgage better. As economy of U.S. has been observed by mixture of high debt
levels and low saving rates since long time, the government must encourage and frame a situation
to re-establish the saving culture. To restore the economic and social benefits, reform in benefit and
pension systems must immediately addressed. There must be transparent, stable and fair
arrangement of taxation. The tax laws are improperly scrutinizes which must be provided more
specialized support and should be created to remove short-term unpredictability. IMF has the power
to lead financial analysis which must be expanded and their early warning system must be upgraded
for institutional weaknesses. Their administration should also be reformed.

There is something frustrating about how the national banks have acted before: they are constant
committing to keep the inflation low, to reconsider their refusal and the inflation of assets,
manufactured period marked by the combination of low wages and instability of economy.

FUTURE FINANCIAL CRISIS

References