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    How can financial liberations lead to financial crises? Wha

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    How can financial liberations lead to financial crises?

    What role does weak financial regulation and supervision play in causing financial crises?

    © BrainMass Inc. brainmass.com October 10, 2019, 4:18 am ad1c9bdddf
    https://brainmass.com/business/the-role-of-government-and-regulation/how-can-financial-liberations-lead-to-financial-crises-wha-455048

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    How can financial liberations lead to financial crises?

    When we have countries that promote this state of financial freedom, it leads to companies taking above average risks in the market. Typically in investing, the bigger the risk, the more money that can be generated from the investment. More risk almost always equals a higher return on the investment, but it is at the price of the risk taken (i.e. is it worth the risk in the long run?) When companies are given the freedom to act under the principles of a liberalized market, they take risks that they normally would not, if the market were not liberalized. This leads to taking the investments, and the projects, and other areas that have a high amount of risk. When we have many ...

    Solution Summary

    How can financial liberations lead to financial crises?

    What role does weak financial regulation and supervision play in causing financial crises?

    $2.19