Market Failure in the Financial Sector: Causes and Effects

The video explores market failure in the financial sector, focusing on asymmetric information, externalities, speculation, and market rigging. It discusses how these issues lead to inefficiencies and negative economic impacts, such as the 2008 financial crisis. The video emphasizes the need for regulation to mitigate these failures and protect the economy.

Describe the relationship between market failures and economic welfare.

How did the 2008 financial crisis illustrate the consequences of market failures?

In what ways can regulation help mitigate market failures in the financial sector?

What are the challenges regulators face in identifying market failures?