Developments and Events in the World of Finance

Bailout or no Bailout, the dust will disintegrate without victorious these bankrupt institutions through the legal, relevant bankruptcy procedures. The bankruptcy shakeup of necessary institutions, such as the mercenary side of Wachovia stick requires immediate application of the Glass-Steagall Acti What is Glass-Steagall Act? Background: In the late 1920s many of the bank holding companies mixed the commercial banking activities with the induement activities. The companies used the commercial deposits to engage in inquisitive activities like real estate and stock speculation; this was a massive conflict of interest. In fact the banks would invest in stocks, commodities and real estate speculations and direct the deposits of the commercial bank to invest in the speculation so as to back up their investment and keep up the value of the stock.Thus the entire banking system was drawn into the bad system. The 1920s saw a outstanding increase in the extent of bank and trust betrothal in non-bank activities, either directly or through affiliates, also the number of national banks operating securities affiliates rose from 10 in 1922 to a peak of 114 in 1931.

The number of banks engaged in the securities business through their bond departments doubled from 62 to 123 during this period. And with the mushrooming of a number of financial institutions, they have become virtual casinos of speculative bets, along with loose credit and dishonest banking practices which were few of the many reasons for the stock market crash in 1929, it was the opening aerate for the great depression.ii Franklin Roosevelt came to power in 1932 elections with the mandate to regulate and repair the financial and banking systems. The Glass-Steagall Act of 1933 was one of the most important banking regulations or reforms passed by the President Franklin Roosevelt The Act basically acted as a legal firewall between commercial banking and investment banking activities.... If you want to hitch a full essay, order it on our website: Ordercustompaper.com

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