Date of Completion

12-14-2015

Degree Type

Honors Thesis

Discipline

Finance (FNCE)

First Advisor

Susan Elkinawy

Abstract

In the midst of turmoil, regulation is “a rule or directive made and maintained by an authority” to maintain order. More often than not, the authoritative figure that imposes and upholds regulatory standards, following its introduction to the specific industry or firm, is the government of the respective country or region. However, politicians, like the rest of us, are unable to predict when a crisis will occur and what appropriate regulation should be imposed to prevent that crisis. Thus, an inevitable concern with regulation is the fact that it is unable to thwart an unforeseeable future crisis but is instead a preventative measure in response to a previous event. As is the case with crises before and after the Financial Crisis of 2008, the imposition of new laws like Dodd-Frank and others were enacted following the destructive effects of each crisis. Unfortunately, financial crises are seemingly inevitable, as people are ultimately self-interested and continue to find loopholes in the laws of the financial system to create incredible profits by unlawful means. Currently the Foreign Exchange Market is facing this very issue in its own crisis as people within the industry are consistently taking advantage of a lack of regulatory infrastructure to make money. What regulations will be imposed remains to be seen. In this paper I will compare the factors that caused each respective crisis and determine what can be learned from the financial crisis and its resulting regulations that applies to the Foreign Exchange Market crisis.

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