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The Subprime Crisis And The Link Between Consumer Financial Protection And Systemic Risk, Erik F. Gerding
The Subprime Crisis And The Link Between Consumer Financial Protection And Systemic Risk, Erik F. Gerding
Publications
This Article will appear in a May 2009 symposium issue of the Florida International University Law Review on the global financial crisis. This Article argues that the current global financial crisis, which was first called the “subprime crisis,” demonstrates the need to revisit the division between financial regulations designed to protect consumers from excessively risky loans and safety-and-soundness regulations intended to protect financial markets from the collapse of financial institutions. Consumer financial protection can, and must, serve a role not only in protecting individuals from excessive risk, but also in protecting markets from systemic risk. Economic studies indicate it is …
The Subprime Crisis And The Link Between Consumer Financial Protection And Systemic Risk, Erik F. Gerding
The Subprime Crisis And The Link Between Consumer Financial Protection And Systemic Risk, Erik F. Gerding
Publications
This Article argues that the current global financial crisis, which was first called the “subprime crisis,” demonstrates the need to revisit the division between financial regulations designed to protect consumers from excessively risky loans and safety-and-soundness regulations intended to protect financial markets from the collapse of financial institutions. Consumer financial protection can, and must, serve a role not only in protecting individuals from excessive risk, but also in protecting markets from systemic risk. Economic studies indicate it is not merely high rates of defaults on consumer loans, but also unpredictable and highly correlated defaults that create risks for both lenders …