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Managerial Economics Portfolio Paper

1198 Words5 Pages

Managerial Economics Portfolio Project
Fiscal and Monetary policies are an important part of the framework of the United States Government and are critical to a successful economy. Policies are constantly proposed and reviewed, even without significant events to drive action. Economists play an important role monitoring key economic indicators and advising the government leaders on policy proposals. The Financial Crisis of 2008 is a significant historical event that drove economic reform measures in order to try to stabilize the economy, minimize recession impact and attempt to avoid a depression. This paper will evaluate four policies enacted following the financial crisis for effect on short-run and long-run economic impact, review macroeconomic …show more content…

et.al. 2010). Two programs were developed as part of the TLGP, the Debt Guarantee Program and the Transaction Account Guarantee program. While this program is a temporary program, this program was looked upon favorably to help draw money back into the financial systems. The FDIC guaranteed, “Certain senior unsecured debt issued by participating insured depository institutions, their holding companies or their affiliates” (Guynn, R.D. et.al. 2010) for the Debt Guarantee Program. Additionally, the FDIC provided unlimited deposit insurance for the Transaction Account Guarantee Program. These two programs did help to ease some of the worry and bring money back into the financial systems however these programs were intended to be temporary and more needed to be done to stabilize the economy. This stimulus supported short-run economics by helping to stabilize the financial system through incentives which also may result in long-run gains from the businesses that benefited from this program. In the event, investments are generated from the money guarantees and savings, and then there may be some long-run benefits from this …show more content…

enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (The Dodd-Frank Act), is referred to as, “the greatest legislative change to U.S. financial regulation since the financial legislation enacted in the 1930’s” (Guynn, R.D., Polk. D and Wardwell LLP. 2010, Nov.). When this act was put in place, this framework had a lot of open questions and discussion required to determine how to implement the intended reforms. Over the coming years, many of the reform initiatives proposed have been addressed and many others are still in progress. The Dodd-Franklin Act introduced regulation reform and intended to put more structure, controls and accountability in place within the financial systems. While the approach does have different challenges for larger banks versus smaller bank and one size approach will not work, putting more rigorous requirements in place appears to be slowly moving the economy in the right direction. The intent of the regulations is to ensure resiliency for the large bank systems to function in financially stressed times, mitigating risk through established minimum capital requirements, buffer requirements and surcharges (Tarullo, D. 2016). In addition, if banks fall below established thresholds, there are hefty fines. Two specific areas’ that can help keep the large institutions accountable is the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ration (NSFR). The LCR requires large banks to hold enough

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