Question

Is it time to better regulate the banking sector in the US? Why?

Answer 1

Banking sector in the US economy should be regulated to some extent in order to prevent failure of banking machinery but too much regulation can prove to be harmful . Freeing up lenders will result in more credit generation in the market . Banking sector works only due to credit generation . So loosening of the leash on this sector will lead to more credit lent out . This will cause rise in investment in the economy which will lead to more production and economic growth .

But in the act of boosting economic growth all regulations must not be removed since that can lead to bank failure due to NPAs .