CHAPTER 3
Great Depression and Reforms
To me, the issue of transparency is really about deception. … But markets on their own seem not able to provide the proper amount of transparency, which is why government has to step in and require the disclosure of information.
—Joseph Stiglitz
Following the complete collapse of the U.S. economy and the discovery of massive manipulation and several large corporate scandals, the 1930s brought in Franklin D. Roosevelt’s (FDR) New Deal and federal regulation of markets and corporations. Of particular importance was the creation of the Securities and Exchange Commission (SEC), which developed rules of corporate accounting and financial disclosure. The SEC was given control over accounting procedures, which ...
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