After the 2008 crisis, the need for an increase in the regulation of financial markets became much more clear in order to protect citizens, companies, and countries from a financial crisis and risky financial products.

Write the following question. It needs to be 550-600 words. Please change all I already wrote as iit is from a friend. Not to be plagiarised Discuss with as much detail as you can the following assertion: There are both theoretical and empirical rationales that push for a new regulation of financial markets.The creation of new regulation does not mean that markets cannot efficiently work by themselves, but that they will do better with significant regulatory constraints to protect society from excesses.
With the 2008 crisis we saw how big banks usually have incentives to seek short-term profits without regard for the long-term consequences of their actions. Thus, financial firms and consumers lent or borrowed to an extreme, until this excessive risk-taking went out of control. The perception of these banks being too big to fail became evidently false (the fall of Lehman Brothers is an example).
Moreover, as financialization (the process in which finance becomes the main form of capital investment in the economy) becomes stronger, the need for new regulation is obvious. Moreover, we have new types of businesses (such as shared economyAirbnb creating a new housing bubble in big cities) or even currencies (cryptocurrenciesespecially Bitcoin) with which old regulation did not treat. In order to prevent new catastrophes, as well as to be fair with old-fashion companies, something must be done to regulate.