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Financial Markets: Relationship between Credit Crises and Alleviating Inefficiency

Some people have suggested that a credit crisis in the financial market indirectly alleviates inefficiency in financial institutions' operations. What could be the influence? Describe how the credit crisis causes this to occur. Suggest at least two proactive steps that financial institutions may take to provide the same influence without the credit crisis.

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The credit crisis in the financial market indirectly alleviates inefficiency in the financial institution's operations. There are several influences making this true to a large extent. After a credit crisis, the financial institutions reduce or even stop adjustable-rate mortgage resetting, predatory lending, and speculation. The financial institutions are ...

Solution Summary

This solution offers cogent arguments relating to credit crises in the financial market and how financial institutions react after these kinds of events take place. This is all completed in about 210 words.

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