The benefit of stricter financial regulation is while the cost is .
A)the end of securitization; the development of more profitable opportunities
B)increased monitoring of risk-taking behavior; higher executive compensation
C)the prevention of excessive risk-taking; impeding financial innovation
D)lower inflation; higher unemployment

Question

Quizplus · Accepted Answer

Stricter financial regulation can prevent excessive risk-taking and protect the stability of the financial system. However, it may also impede financial innovation and can come at a cost to businesses and consumers. Option A is incorrect because securitization can still exist under strict regulation, and there is no guarantee that more profitable opportunities will emerge. Option B is incorrect because higher executive compensation is not a direct benefit of stricter financial regulation, and increased monitoring of risk-taking behavior could actually lead to decreased compensation for risky behavior. Option D is incorrect because there is no direct correlation between stricter financial regulation and inflation or unemployment rates.

The Benefit of Stricter Financial Regulation Is While the Cost