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Introduction

The global economic crisis began in the US when a fall in housing prices resulted to main problems at the US subprime lending outfits. This in turn gave rise to problems at the main US financial organizations and a great credit crunch, which affected worldwide economy. As the crisis progressed, taciturn consumer spending weighed on worldwide economic prospects and large scale spending plans which had been put forth by the US government created fears that the financial crisis could result to huge budget and deficits on current accounts could balloon further.

The global economic crisis and US Interests

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The Global financial crisis began in the US with housing market bubble together with the increase in foreclosures. Numerous of the biggest and most susceptible banks, insurance companies and investment houses have been declared bankrupt or have had to be saved financially. The crisis have exposed considerable weakness in the economic schemes globally, and in spite of the coordinated easing of financial policy by US government and governments in other countries, the effect of  the crisis is still on (Peters 21-2).

Nanto notes that United States has come up with Policy making to tackle with the global economic crisis and ensuring worldwide recession is moving from containing contagion to particular actions which are aimed at enhancing recovery and changing regulations so as to prevent the problem from occurring again. The US congress is playing a multifaceted role in the financial crisis and the overall concern is to come up with measures that will ensure efficient and smooth operation of financial markets so as to promote the overall well being of the nation whilst safeguarding the interests of taxpayers and facilitate business operations without generating a moral hazard (112).

The US congress is preventing future financial crisis via domestic regulatory measures and legislation and has also been offering ground rules and funds for financial stabilization and rescue packages.  The Congress is also using measures to transform the global financial scheme, in recapitalizing global financial organizations like the international monetary fund and in restocking finances for poverty alleviation sections of the World Bank and local development banks.

In the US, the financial crisis touches on basic countrywide interest of safeguarding the financial security of American people. It is also posing a great impact on the US in attaining countrywide foreign policy objectives, like supporting political constancy and cooperative relationships with other countries and maintaining an economic infrastructure that permits smooth operation of the global economy (International Monetary Fund 36).

The effects of the economic crisis are being manifested on Main Street and Wall Street and also on international flows on imports and exports, growth rates of unemployment, and government expenditures and revenues. The concurrent slowdown in financial activity around the world signifies that developing economies as well as emerging markets haven't decoupled from industrialized nations and governments cannot rely on exports to get them out of the recessionary conditions (Nanto 109).  

Policy and legislation

The US financial policy is intended to contain contagion and deal with ensuing recession. The most significant legislative actions are the Troubled Asset Relief Program which is aimed at offering support to financial organizations and the American Recovery and Reinvestment Act which is aimed at offering stimulus to the US financial system.

According to Peters, policy proposals to transform particular regulations together with structure of supervision and regulation at both international and domestic levels are coming forth via the legislative procedure, from administration and from suggestions by global organizations like the financial stability forum, international settlements bank and international monetary fund (27).

Several bills have been introduced in the Congress that tackle matters like establishment of a commission that will investigate the causes of the economic crisis, offer oversight and more accountability of Reserve and the lending activity of Treasury. The committee is also supposed to tackle problems in the mortgage and housing markets, offer financing for international monetary fund, address consumer credit cards problems, offer improved supervision for commodities and financial markets, deal with the country's debt and create a systemic financial risk monitor.

New challenges in managing the financial risk

The acts of the US and other countries in tackling the global economic crisis aimed at containing contagion, lessen losses to the society, reinstate confidence in financial instruments and institutions and lubricate the financial scheme so that it may be capable of returning to full functioning. Much attention is now focused on the stimulation of the economy and stemming downturn in the macroeconomic situations that is raising unemployment and pushing numerous organizations into bankruptcy.

Since 2009, much of the global wealth has been destroyed since the financial crisis started, though equity markets have somehow recovered since then. There is still uncertainty over if nascent financial recovery will finally end when government stimulus measures stop and if the present hazard is a deviation that may be resolved through tweaking the financial scheme and if it reflects problems in the system that need main changes. What is evident is that ingrained interests are very strong to an extent that even comparatively small changes in, for instance, the structure of monetary control in the US is hard.  The goal of the US in managing the financial crisis is to transform the regulatory structure together with its regulations , the worldwide monetary architecture and imbalances in capita and trade flows  so that future crisis do not happen or to at least  alleviate  their impacts. Judging from the policy proposals to deal with the economic crisis in US, it seems that the solutions are based on a multipronged approach. They are aimed at the diverse degrees in which economic markets operate nationally, globally and by particular monetary sector.

The global economic crises extended nationwide boundaries and spread for the individual financial organizations to the larger community.  Several countries in the world suffered from the original monetary damages and collateral damage because of their connection through trade, investment and financial flows. To some degree, the international monetary fund and World Bank have tended to lay much emphasis on macroeconomic flows but not on the macro prudential regulation. 

According to International Monetary Fund (IMF), the global economic crisis was caused by a convergence of processes and factors at both macro monetary level and micro financial. This collective influence at both micro and macro factors led in market excesses and the rise of risks of unprecedented complexity and magnitude in the financial system. In the US regulation is by function. There hasn't been systemic or macro prudential oversight and regulation .Different regulatory agencies supervise every financial service line: insurance, securities, and banking This is a microprudential regulation in which no sole regulator has all the authority and information needed to monitor synergistic and systemic risk or probability that apparently insolent incidents could result to broad displacement and an economic crisis so prevalent that it influences the actual l economy.  Additionally, there is no a sole regulator that can take synchronized activity throughout the economic system (20).   

Conclusion

The global economic crisis is a major issue in United States and has touched on the basic nationwide interests of safeguarding the financial well being of Americans. The crises are being manifested in global flows of imports and exports and, increasing rates of unemployment. The US government has therefore established policy making and legislation that will help to end the financial crisis or to at least alleviate its effects.

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