Law-ethics exam 1 review.doc

Law-ethics exam 1 review.doc - 1.) financial meltdown-...

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1.) financial meltdown - Began with the deregulation of the Glass-Steagall Act in 1999 which followed with the deregulation of derivatives and hedge funds in 2000. Bush and Greenspan agreed to this. Moral hazard- laissez-faire-don’t bail out the banks because they got themselves into this financial mess (Lehman brothers). Systemic risk- If one firm fails than many other interconnected firms will go down like a domino effect. Tarp- Direct capital injection into banks. Why consolidate now? Buy low and sell high. The companies are selling for cheap to save themselves. Paulson was the secretary of treasure and greenspan was the FED chairman. Now it’s Gaidner for treasure and Bernanke for FED. Paulson came up with the idea of capital injection but Bernanke didn’t totally approved. Used to buy toxic assets. TARP- toxic asset relief program. 2.) G20 - A group of the 20 largest industrial nations that replaced the G8, met on Sept.24-25 in Pittsburg to discuss the financial meltdown. 1. Reserve requirements 2. Executive compensation 3. Reduce Chinese exports 4. Economic policies of the U.S and E.U. 5. Reconstruction of the IMF. The group agreed that the G20 will become the new permanent council for international economic cooperation. Pay more attention to the reserve requirements. Start monitoring executive compensations. The IMF to monitor issues and give more power to developing countries and greater voting power to larger countries. IMF to monitor nations and economic policies to promote long term growth, create new strategies for stimulus measures, Europe- structural changes to boost investments. U.S-less credit shopping, China-open wallets, U.K.-More trade. China made judgment to reduce coal-fire power plants by 2020 to help with the green environment. Long- term executive bonuses. United bank of Switzerland - U.S. government wanted 52,000 names of felony tax evasion. Switzerland didn’t agree because tax evasion isn’t illegal in country. In the end Switzerland agreed to give 5,000 names for audit. (The U.S. is the only country which places an extra territorial application on international business. 3.) Treaty of Lisbon - Signed is Lisbon, Portugal. Further integration of the 27 E.U. leaders on business decisions. This will help the E.U. compete with business. Many of the countries only have legislative votes. Has been approved by all 27 countries but not ratified by Ireland, Czech Republic, and Poland. Ireland was the only one to hold a referendum. France and Netherlands rejected the European constitution so the Lisbon treaty was created. Will have a president of E.U. (entire
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body), foreign minister, unified foreign policy, give more power to European parliament in France, centralized banking regulations. Now- the president of the E.U. switches from country to country every 6 months. 4.) Anti-trust law
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This note was uploaded on 03/07/2010 for the course FIN 3403 taught by Professor Keys during the Spring '10 term at Florida Southern College.

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Law-ethics exam 1 review.doc - 1.) financial meltdown-...

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