Question

You just watched a video in which President Obama announces his plan for financial regulatory reform. According to President Obama, what are the reasons for the financial crisis?

Answer 1

You just watched a video in which President Obama announces his plan for financial regulatory reform. (ANSWER)

President Obama indicates that there are several reasons for the financial crisis. According to the president, one reason is irresponsible practices by financial institutions. The amount of risk involved in newly created investments was high, and few investors or consumers understood this. These types of investments were made possible due to a lack of regulation within the system.

Answer 2

The following are President Obama's remarks on the financial crisis caused by the irresponsible behavior of financial firms:

• According to President Barack Obama's statements on financial regulation, the current crisis was caused by financial businesses failing to communicate the degree of risk to investors.
• As a consequence, we can see that this statement is correct, as the United States of America's financial crisis, created by banks selling worthless assets to their clients, which were repackaged to appear as investments.
• The 2007-2008 financial crisis was fueled by financial corporations' risky behavior, such as betting against their customers. Financial firms repackaged and marketed certain risky assets, and some of them received good credit ratings. Investors had no understanding of what they were getting themselves into, and when the credit rating of the securities changed, the system was in turmoil.