Explore BrainMass

Accounting Ethics

"During the period of 2007 to currently, America has seen the demise of Lehman Brothers, the saving of banks deemed "Too Big To Fail," mortgage foreclosures on the rise, big bonus payouts, high unemployment, a larger gap of export/imports, the crisis of European states like Greece, Portugal, Italy, loss of dollar monetary value, etc."

Not long ago the government (legislators) pushed for expanded home ownership programs and banks and mortgage brokers complied (maybe not in the most ethical way). The government then bailed out the banks that created the problem (brought on in part by the government) and now the government is going to sue the banks.

Here is the link to the article.

Any thoughts about government intervention in this case?

Solution Preview

The formation of Fannie Mae and Freddie Mac was the financial intervention that the government made. The purchase of securities from investment companies was a strategy used by the government to stimulate housing purchases. When Fannie Mae and Freddie Mac were formed and when they purchased securities from large investment companies, the government implemented its policy to stimulate the economy by encouraging housing purchases.

In its eagerness to encourage housing lending, the government created an environment in ...

Solution Summary

This answer offers cogent arguments relating to Accounting Ethics