Lecture17

Lecture17 - Lecture 1 7 : Investment Banking and Secondary...

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Unformatted text preview: Lecture 1 7 : Investment Banking and Secondary Markets Economics 252, Spring 2008 Prof. Robert Shiller, Yale University Glass-Steagall Act 1933 The modern concept of Investment Bank was created in the Glass-Steagall act (Banking Act of 1933). Glass Steagall separated commercial banks, investment banks, and insurance companies. Carter Glass, Senator from Virginia, believed that commercial banks securities operations had contributed to the crash of 1929, that banks failed because of their securities operations, and that commercial banks used their knowledge as lenders to do insider trading of securities. Henry Paulsons Proposal Objectives-Based Regulation Market stabililization Regulator Prudential Financial Regulator Business Conduct Regulator Paulson Continued Federal Charter for insurance Mortgage Origination Commission SEC and CFTC merge Merge OTS with OCC Equip fed to monitor risks Investment Banks Bulge bracket firms: First Boston, Goldman Sachs, Merrill Lynch, Morgan Stanley, Salomon Brothers, Lehman Brothers. Traditionally were often partnerships, but partnership form is disappearing. partnership form is disappearing....
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Lecture17 - Lecture 1 7 : Investment Banking and Secondary...

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