Learning More About Financial Regulation in Microeconomics and Macroeconomics
Ask any economics student about the disciplines of economics, and they will tell you that these two are microeconomics and macroeconomics. And you have to know that both disciplines don’t seem to like one another. In the present, there will be many changes that will affect the financial services industry. There are many things that are affecting the financial regulation of the country. It is only in present years in the financial services industry that two major forces are clashing with each other. When it comes to business students, they often lean toward microeconomics. Profit maximization is essentially what this particular business area targets. For businesses to grow and make more money, fixed costs and marginal costs must be optimized. In simple terms, how CEOs view the world is what microeconomics is all about. It is the job of the CEO to do what they can for the benefit of the company for it to deliver value and make more money.
For people who are particular with policy, though, what attracts them the most will have to be macroeconomics. The goal of this economic discipline is to attain equilibrium of the market. Simply put, services and goods with the greatest number can be exchanged between sellers and buyers with the application of mutually agreeable prices. Competition between business establishments is good. What may be bad for the market will be the rise of oligarchies and monopolies. It would seem like you are seeing the world using the eyes of the government with macroeconomics. This implies making everyone involved happy or even sort of equally unhappy.
You can expect these two perspectives to be going against each other with who different they are. While efficient markets generally make everyone happy, the government must take the necessary steps that may go against the microeconomics of businesses to get there. There are times that the financial industry must stop a merger so that competition can be promoted. Other times, there must be proper legislation of disclosures for both sellers and buyers to make informed decisions. At the same time, certain activities must be stopped or regulated so that some will not be harmed by others financially.
The extent of market regulations is always a never-ending fight between the government and business sector, which is very much something you can expect. Unfortunately, the battle between microeconomics and macroeconomics stops when everyone is happy with the booming economy. Businesses become happy when they are making money. You get happy consumers too if these people have money. The government is quite happy because the system is working just fine for everyone.
Unfortunately, the ongoing financial crises have signaled the impending ruin of the financial services industry. It is the job of government regulators to keep track of these market bubbles. It is also their job to recommend the necessary financial and securities regulations and measures to prevent whatever is going on from harming the economy.