Which of the following does not explain why the Glass-Steagall regulations lost their effectiveness?
A)Over time, nonbank financial firms were able to borrow directly from the public, rather than having to borrow from commercial banks.
B)The Federal Reserve created regulations that ran counter to what the government was trying to do.
C)With the advent of new financial instruments, regulated banks lost business to unregulated institutions, and credit began to flow through unregulated systems.
D)As regulations became too successful, people wanted to eliminate these regulations in order to pursue the magic of the free market.

Question

Quizplus · Accepted Answer

The Federal Reserve creating regulations that ran counter to the government's intentions does not explain the loss of effectiveness of the Glass-Steagall regulations. The other options (A, C, and D) describe scenarios where the financial landscape evolved beyond the scope of the original regulations or where there was a shift in public or political sentiment, directly impacting the effectiveness of these regulations.

Which of the Following Does Not Explain Why the Glass-Steagall