Global Financial Crisis and the Ramifications and Impacts upon Ethics Research Paper

Global Financial Crisis and the Ramifications and Impacts upon Ethics and the Developmen of Ethical Behavior - Research Paper Example As such, this brief paper will analyze some of the ways in which this researcher believes it could have ultimately been prevented, the means whereby ethical standards were violated. Although it is oftentimes noted that hindsight is 20/20, it is worth discussing these mechanisms as a function of gaining a further insight into the way that the market works and seeking to prevent a similar situation occurring within the future. Due to the high level of understanding that current economists have with regards to the Great Depression, many forms of protection have been placed within the current economy as a means of ensuring that the same type of catastrophe, based on the same causal factors, does not occur within the current market. However, these forms of protection were not always present and it can be effectively argued that these were some of the main reasons why the crisis itself was able to be perpetuated and had such long and damaging effects. Finally, as a function of understandin g the crisis, what precipitated it, and what furthered it, this analysis will devote a degree of time to analyzing behavioral bias that existed within the system. Background and Analysis of Causal Factors and Precipitators: As such, it is necessary to know, understand, and discuss the forces which could have prevented or at least greatly assuaged the crisis as it has been presented to the financial markets and subsequent global economies over the period of the past 5 years time. In this way, such an exploratory look into the realm of the financial crisis and its subsequent aftermath can allow for a more informed understanding of how the crisis itself could have been prevented as well as the formulation and creation of new and insightful ideas within the reader with regards to how such a situation might be stopped in the future. The first aspect of anticipation and reduction to the crisis came as early as the mid to late 1990s when a number of lawmakers and political analysts began t o make a series of warnings concerning the untenable nature of the ways in which the financial sector was being deregulated (Liang, 354).1 Although this deregulation has been attributed to both sides of the political spectrum, in all fairness it can be assumed from a moderate interpretation that both sides were complicit in the wholesale deregulation of the financial sector which ultimately caused the collapse of the real estate bubble (The Banking Crisis 9).2 Moreover, the first real and measurable signs of impending difficulties on the horizon were first demonstrated around the year 2006 when the Department of Commerce noted that new home permits had dropped an astounding 28% (Hsu 497).3 Normally incremental increases and/or decrease in the reduction or expansion of new home permits are little cause for alarm; however, when something as earth shattering and innately odd as nearly a 1/3 reduction in the demand for housing should have been a major red flag to the Federal Reserve as well as the entire regulatory system. However, rather than heed such a statistic, the Federal Reserve remained unrealistically optimistic regarding how the economy would likely behave over the next several months and years (Horner 33).4 This allowed for the current situation to continue to extend itself for approximately another 2 years time before the final result of such a failure in oversight and monetary policy was noted by the stock market in the painful round of