Microeconomic and Macroeconomic Trends and Financial Regulation
Ask any economics student about the disciplines of economics, and they will tell you that these two are microeconomics and macroeconomics. And you have to know that both disciplines don’t seem to like one another. In present times, the hammer will drop at any minute in the financial services industry. There are many forces that affect the current financial regulation of the country. In the present-day financial services industry, there are two major forces that are coming face to face. Microeconomics is the area of business that students often lean towards. For this business area, people strive toward maximizing their profits. Fixed costs and marginal costs are the two aspects that help businesses maximize their ability to make money. Essentially, you are looking at the world using the eyes of the CEO with the concept of microeconomics. And their role is to do whatever is best for the company by delivering value and making more money.
With macroeconomics, on the other hand, it appeals more to all the policy nerds. Achieving market equilibrium is the overall goal of this economic discipline. Simply put, services and goods with the greatest number can be exchanged between sellers and buyers with the application of mutually agreeable prices. You get a good competition between business establishments. What is bad for businesses will be oligarchies and monopolies. It would seem like you are seeing the world using the eyes of the government with macroeconomics. In essence, this economy strives to make everyone involved happy, which often opposites making everyone equally unhappy too.
You can expect these two perspectives to be going against each other with who different they are. Even if most individuals agree that everyone can benefit from efficient markets, it is not all the time that the government must side with microeconomic business interest when they take the essential steps to benefit everyone. If necessary, the government, especially the financial industry, may block a merger so that they can promote competition in businesses. For sellers and buyers to make informed decisions, too, legislation of disclosures may be necessary. At the same time, certain activities must be stopped or regulated so that some will not be harmed by others financially.
You can always expect the government and business sector to fight over market regulation extent. Unfortunately, the battle between microeconomics and macroeconomics stops when everyone is happy with the booming economy. Businesses become happy when they are making money. You get happy consumers too if these people have money. If the system works well for just about anyone, the government becomes happy.
Unfortunately, the ongoing financial crises have signaled the impending ruin of the financial services industry. Any market bubbles are the responsibility of government regulators. It is also their job to recommend the necessary financial and securities regulations and measures to prevent whatever is going on from harming the economy.