(Goodhart, p. Furthermore, existing regulation of firms that operate in the financial services sector – referring to the Western financial system – is not appropriately developed – in terms of the priorities set by its rules; in this way, the non-compliance with the capital requirements can lead even to the cancellation of a firm’s documentation – referring to the documents that are used for proving the firm’s existence – because of the lack of validity; however, if severe failures are identified in this firm’s strategic decisions – meaning the decisions on investment schemes for the customers’ funds – then the measures taken by the state against the firm can be limited – even non-existent. In the study of Goodhart, it is made clear that the responses of the Western financial system to a financial crisis can be explained by referring also to this system’s macroeconomic structure; the regulation of this system has been also regarded as being responsible for this system’s failure to face the crises of 1997-1998 and 2007-2009. The macroeconomic structure of the Western financial system is characterized by the key role of the executives – the power of these individuals is extended at such level that their decisions can be differentiated from the view of the government or the public on a specific issue referring to their firms’ activities. . The Difference between Western Financial System and The East Asian Financial System.
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