The US Securities And Exchange In Response To The Great Depression

The U.S. Securities and Exchange (SEC) was created in response to the 1929 stock market crash which was responsible for monitoring and regulating the stock market after the crash which led to the Great Depression. Since the creation of U.S. Securities and Exchange agency multiple laws and regulations were added to help maintain the balance and oversight of the exchanges and the stock market. Additional laws and regulations have been added as a result, in condition or incident within the stock market, corporations, and securities. Several scandals since 2002 have led to an increase of laws and regulations, these laws have led to controversial topics dealing with the costs associated with enacting regulations. Questioning, whether we are over

Waiting for the SEC to act on the newly implement laws can take the SEC years to understand, all while trying to predict future problems. The cost of over regulation can be felt, though every aspect of the SEC, investors, and corporations. The same argument can be said about the staffing within the SEC, limited staffing can lead investors and corporations to lose money, which over time can cause havoc throughout the economy. One such example of over regulation is in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This 192 page law can cost hundreds of thousands of dollars to investors and corporations. This law has generated complications throughout the economy, an article in the economist stated, “Another product of Dodd-Frank is a plethora of new government powers and agencies with authority over areas of the American financial system and economy affecting veterans, students, the elderly, minorities, investor advocacy and education, whistle-blowers, credit-rating agencies, municipal securities, the entire commodity supply chain of industrial companies, and more. Quite a lot had tasks already done by others—frustrating the act's worthwhile objective of consolidating fragmented pre-crisis supervision. A new office within the Treasury department is intended to forecast and head off disasters—already a goal of research groups at the 12 regional Federal Reserve

The cost associated with regulating every aspect of the economy is substantial. The SEC is relying on other federal and private organizations to help share the burden of regulating the economy. There are many risks associated with allowing private entities to help regulate investments, especially as we move to a global economy. Who will monitor the private organizations? How will safeguards be put in place to ensure private organizations are not looking for loopholes and schemes around laws and regulations? We will need additional departments within the SEC to monitor private entities, which can become a vicious cycle, creating more chaos. With additional federal organizations and private entities helping enact laws and regulations, the creation of more “red tape” occurs at all levels and ultimately reduces economic ventures for corporation and investors. Over the past decade, we have seen new laws passed, all in the name of protecting investors. As we move toward a fast paced global economy, laws have been passed in good conscience to protect businesses and investors alike. However, the consequences of the second and third order effects are still being weighed and will likely be debated for a long