Open Yale CoursesECON 252: Financial MarketsLecture 17 - Investment Banking and Secondary Markets<< previous session| next session >>Overview:First, Professor Shiller discusses today's changing financial system and recent market stabilization reformintroduced by U.S. Treasury Secretary Henry Paulson. The financial system is inherently unstable and wouldbenefit from more surveillance, particularly for consumer protection issues, given the recent subprimemortgage crisis. Although this particular reform might not be successful, more regulators and policymakersare talking about changing the stabilization system and will likely alter the role of the Fed in the future.Second, Professor Shiller introduces the mechanics and role of investment banking. Investment banksunderwrite securities and arrange for the issue of stocks and bonds by corporations. Corporations work withinvestment banks to navigate the Securities and Exchange Commission requirements for issuing securities.
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