Dodd Frank Crisis Essay
Housing Mortgage problem in the USA triggered the global financial crisis which had a side effects to the World in 2007 (Kidwell, Blackwell & Whidbee, 2017, p. 11). This financial downturn forced some of the banks to shut down. Like in the USA, Iceland passed through an economic crisis which was the worst ever (Jónsson, 2009). The central financial institutitons, the major three banks collapsed because of this recession. Even before the crisis, these banks could easily contact with the global markets and financial areas. However, after the crisis, these institutions even could not meet their investment returns which they held them longer periods because of their huge accesses to the global finance before the recession. Because of this economic downturn, banks would like to get the …show more content…
One of them is related to the nationalization of the biggest banks (Landsberg, 2013). The banks were guided by the government with the legislation in. Dodd-Frank Wall Street Reform and Consumer Act was created to respond the crisis in the USA (Becker, 2016). Dodd-Frank Act established in order to eliminate the financial institutions’ enforcements from the consumers as well as making financial regulations for the banks. The intervention for the crisis of the Iceland was not included the same directions as USA (Eiríkur. (2014). Different tah USA, Iceland was focused on supporting its national banks from collapsing (Baldursson & Portes, 2013). Iceland did not focus on the guiding its banking sector from this type of recession or downturns although USA did because they were afraid of the future losses of the economy. For the consumers who were negatively influenced by this type of downturns, government established loans for supporting them. Despite the inflation eliminated in the USA, unemployment grow in that time. However, as a result of the elimination of the inflation, which were stabilized, sustainable growth occurred in the
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