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Market Failures and Government Interventions Student’s Name University Affiliation Market Failures and Government Interventions Market failure refers to a situation in which a market fails to satisfy the consumer demands which results when supplies fail to equate to consumer demands. Market failure results from several factors such as transportation, competition on demanders and suppliers, government among others. Their markets face several shortcomings which include market power, public goods, asymmetric information, macroeconomic, externalities, natural monopoly and systematic failures. The market, in this case, faces systemic risks which result when micro decisions lead to macro shortcomings. The brokerage industry was suffering from lack of proper information flow between the public and the brokers and financial and financial institutions (Beillfus, 2017). In attempts to counter this risk, the US government initiated the fiduciary rule which is an impartial conduct standard. The rule helps curb systemic risks in the country by regulating the services financial professionals accord the people. This rule is not a market failure but a form of government intervention to help the people from the exploitation of brokers. This paper seeks to analyze how the fiduciary rule is an intervention on market failures in the financial industry. Also, the paper looks at the opponents of the fiduciary law and their argument against the rule. For a long period of time, the financial industry has exposed people to systemic risks resulting from lack of crucial information. The risks subject people to loss of their hard earned money due to lack of information before committing
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