BANKINDUSTRYCLASS - 1 Banking Industry: Structure,...

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Unformatted text preview: 1 Banking Industry: Structure, Regulation, Failures and Changes Key Points Development of U.S. Banking 1 Financial Innovation and Changes in Banking Structure of Banking Regulation The S&L and Banking Crises of the 1980s International Banking Crises The Current Crisis and Regulatory Changes In the News? 2 Corzine Had MF Global Leveraged 80 to 1 Course Issues Spring Course Ideas Investment Game Round 3 Mutual Funds Midterm results, meaning, etc 3 Extra Credit - coming Check grades in Gradebook! Clicker Points- last chance to fix Food Inc ODE 2 Greenspan on Banking banking in the United States today is strong, vibrant, and profitable. in the past half-century questioned the long-term viability of commercial banking. U.S. commercial banks, began the post-World War II period as the dominant financial institution, soon faced intense competition from thrifts, from new forms of mutual funds, from customer direct financing in the securities markets, from foreign banks, and from a wide range of nondepository lenders. ability to respond increasingly constrained by rules and regulations established in the far different environment of the Great Depression of the 1930s. changes in technology and of the changes in technology and of the rapid growth in globalization, which created new risks as wel as new opportunities. management skil s of bankers and the ability of regulators and legislators to adapt, albeit slowly, to change. assisted acquisitions of almost 120 banks and the actual demise of about 1,250 of them between 1985 and 1992 bad credit judgments, in real estate, energy, and foreign credit markets, high interest rates deep recession, survivors recapitalized by raising $176 bil ion of new long-term capital, including $13 bil ion of equity, from 1991 to 1995. the systems and procedures that were put into place by many institutions remains one of the hal marks of todays banking industry. 4 Course Ideas 5 Odd Structure of U.S. Banking? Too Many, Too Small Banks Historical Branching Restrictions Compared to other major nations Dual Banking System split regulation Evolution of banking in u.s. state and federal 6 Now State, Federal Fed, Comptroller of Currency, FDIC Restrictions on activities - Glass Steagall 1933 Gramm-Leach-Bliley Financial Services Modernization Act end of Glass Steagall 1999 Universal Banking Germany, Netherlands, Switzerland 3 Glass Steagall Banking Acts of 1933 (Glass-Steagall) and 1935 Carter Glass- senator, treas sec. author fed act and Glass Steagall Separated commercial banking from the securities industry JP Morgan versus Morgan Stanley and back again Also: FDIC, checkable deposits to commercial banks, no interest payments on checkable deposits, Placed interest rate ceilings on savings 7 and time deposits (Q)....
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BANKINDUSTRYCLASS - 1 Banking Industry: Structure,...

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