A Specter is Haunting the Financial Industry - The Specter of the Global Financial Crisis: A Comment on the Imminent Expansion of Consumer Financial Protection in the United States, the United Kingdom, and the European Union

This Comment explores the regulatory fallout from the global financial crisis. Across borders, policy makers are united in their conviction to reconcile the perceived failures of their predecessors to foresee and prevent the crisis, the effects of which show no signs of abating. A critical component of what caused the crisis was the inability to correct failures in the consumer credit market, specifically in subprime mortgages. Exacerbated by an influx of capital and a generally weak regulatory environment, this market failure manifested itself forcefully through a tidal wave of defaults in the American mortgage market that sent shock waves around the world.

Unanimously, governments have responded with structural changes to their regulatory regimes with a renewed emphasis on consumer financial protection. While developments continue to be in flux, this comment explains how the structural changes, as currently understood, will usher in an unprecedented myriad of laws, rules, guidelines and regulations to be imposed on financial institutions around the globe.