Introduction After the adverse effect of the economic disturbances that hit the United States of America (USA), the country is slowly but surely showing signs of recovery. This was termed as one of the deepest economic recession the country has ever experienced since the 1930s. The sheer magnitude of this recession and the extent to which it affected the lives of American citizens is beyond measure. It left people wondering what happened exactly, what is the probability that it is going to happen again and what steps has the current government taken to mitigate the effects. The financial market regulation is one of the key areas that the economy relies on as the first line of defense, to correct the inefficiencies of the economic system. Regulatory, corrective and preventive measures hold a significant stance in the correction process of economic disturbances. Thesis statement In as much as the United States faced a serious economic meltdown that tremendously affected in several aspects of the economy, it is clear that several factors contributed to the undesirable situation, which is currently mitigated by imposing several promising economic strategies that show tremendous signs of improvement. Critically looking at the various scenarios presented by the 2007-2009 financial turmoil, the fundamental interest is to ensure Americans live free from adverse economic effects (Karen, & Sabato, 2009). The economic system should be in a position to bring consciousness to American citizens, who are usually unaware of investment terms used to regulate financial markets. For instance, in the systemic risk, core financial institutions and markets failure may negatively affect the financial system and in turn, influence other participants of the economy in other sectors. Additionally, the deleveraging aspect where corporations borrow finances to purchase asset for purposes of growth with regards to return on investment also affects other aspects of the economy. Nevertheless, when these assets are sold at a lower than expected amount, it may lead to losses hence causing financial depression. Procyclicality is also another significant aspect whereby market participants’ act on a business cycle, which exhibits boom-and- burst outcome. A perfect example is the process of borrowing during the upsurge and deleveraging during the recession. Regulations to reduce this effect are exceptionally challenging to formulate. The fourth facet is preferred equity whereby debts are given a higher priority than common stock in the event of insolvency. Some banks may possibly improve their capital by changing their preferred equity into ordinary stock. These are just but a few areas one needs to comprehend before dissecting the causes and impacts of the economic crumble. The argument that most economists and the political elite have put forward as to why the recession occurred is the breakdown of the real estate market, which destabilized the prices of houses, throwing the financial system into a crisis. However, looking at the real issues that provoked the recession date back to the 1990s, when people from the lower-income bracket reverted to home ownership, the government was forced to find means to make the situation stabilize. The two evident causes of action were to support initiatives of households’ revenue growth and compelling banks to flex their rules on providing mortgages. Consequently, it was practically difficult for low-income earners to own houses in many states across the country,