Research on the Effectiveness of Regulatory Systems in the Wake of the Financial Risis: Case of Goldman Sachs

Jiangtian Shi ()
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Jiangtian Shi: University of Sheffield, Sheffield University Management School

A chapter in Proceedings of the 2022 International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2022), 2022, pp 1080-1086 from Springer

Abstract: Abstract In 2008, a global financial crisis broke out, leading to many companies’ collapse and the market’s disruption. The crisis began with subprime credit, and, due to the US government’s regulatory problems, the housing bubble grew until the day it exploded. The market regulatory system did not regulate financial products sufficiently and did not have strong controls on leverage. In the financial crisis, many companies had high leverage ratios, which allowed them to reap enormous profits for a short period. After the financial crisis, excessive leverage triggered a domino effect. Many companies could not take on too much risk, and collapse became inevitable, such Lehman Brothers. When the regulatory system was introduced, the question of whether it was effective became a matter of consideration. This paper uses the comparative analysis method to analyse the financial situation of Goldman Sachs, which covers the period 2005 to 2011. The financial analysis’s primary focus is revenue, leverage and share price. The analysis of the financial situation of Goldman Sachs shows that the post-financial crisis regulatory system was effective.

Keywords: Financial crisis; regulation; Goldman Sachs (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-052-7_121

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DOI: 10.2991/978-94-6463-052-7_121

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