Why Regulatory Change Happens – Part 2 SCANDAL

Scandal  We tend think of scandals as one time large events with headlines that target or pinpoint one person or a single company.  But another word for scandal throughout an entire industry or market is usually labeled a crisis.  I don’t love The Donald (as in Trump) but he predicted in early 2008 that the slippage that was only then beginning to occur in the sub-prime markets would impact the economy far beyond just banks and sub-prime borrowers.  He reminded lawmakers that the housing sector was deeply intertwined with our economy as a whole, and that trouble in the housing market would mean trouble to our economy as a whole…and he was right.  When something that big happens, there is bound to be a regulatory response.  Especially if there has been significant deregulation in the past – as was the case with banking and finance laws.