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This should provide investors and depositors with

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Unformatted text preview: n the health of the U.S. banking system. • Asset Backed Securities: In addition to the 5% retention rule provided in 2010, new rules effective September 2011 now prohibit asset-backed security originators from shorting positions on their balance sheets they sold to the public in the past 12 months. This new material conflict of interest rule was in response to short positions some large investment banks took on L Some of Colorado’s troubled community banks were able to raise capital and repair their balance sheets; however, six could not and were closed by the FDIC in 2011. residential mortgage-backed securities they originated and sold as viable investments at the beginning of the 2008 credit lockdown. • Proprietary Trading and the Volcker Rule: While still a work in process, this rule would limit most proprietary trading where banks place bets for themselves rather than their clients. The 1999 repeal of Glass-Steagall Act made proprietary trading a profit center and removing it now could hinder the ability of banks to recapitalize. Proponents of the rule suggest providing government support and...
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This note was uploaded on 02/11/2013 for the course MGMT 231 taught by Professor Yu during the Spring '13 term at Bauder.

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