How did Glass Steagall actually caused bank runs nearly 50 years later and why did it...

How did Glass Steagall actually caused bank runs nearly 50 years later and why did it happen?

Expert Solution

Glass-steagall actually cost the bank runs nearly after 50 years later in the form of 2008 financial crisis when it was attributed with the collapse of various commercial as well as investment bankers because it brought in Betting culture in the banks by getting themselves exposed to the derivative instruments and getting themselves get away with the depositors money taking higher risk through glass-steagall act.

it has been preferably noted by various experts that glass steagall act has promoted a culture of betting in various commercial banks and investment banks and they were exposed to high possible risk during the times of 2008 financial crisis because of these theories which was established by glass-steagall and it was attributed that bank should not have been engaged in such risky exposures because they were entrusted with the depositors money and hence they were badly exposed during the economic downturn and they were filing bankruptcy so it can be attributed to the batting approach which was introduced by glass-steagall act into the commercial banking which will be exposing this commercial and investment banks to the Wall Street hybrid securities.

It happened due to getting exposed to the hybrid instruments and taking higher risk and not matching their duration and having low quality asseta

jeff jeffy answered 1 year ago

Why is this fintech revolution happening now, not 50 years ago, not 50 years later?

In what way, if any did the Financial Services Modernization Act of 1999 & Glass-Steagall Act...

In what way, if any did the Financial Services Modernization Act of 1999 & Glass-Steagall Act help accelerate a financial crisis?

1. Why is this fintech revolution happening now, not 50 years ago, not 50 years later?...

1. Why is this fintech revolution happening now, not 50 years ago, not 50 years later? 2. How big data supports Fintech credit scoring? Will that raise any ethical problems? Any law enforcement on that? 3. Comparing the emerging of derivatives innovations decade years ago and Fintech, are there any similarities, dissimilarities? Do you think Fintech will replace derivatives’ role, or it will complete derivatives’ role?

(c) Actually, the 10,000 larvae in each group came from a series of 50 different runs...

(c) Actually, the 10,000 larvae in each group came from a series of 50 different runs of the experiment, with 200 larvae in each group for each run. The researchers believe that conditions differ from run to run, and thus it makes sense to treat each run as a case (rather than each fly). In this analysis, we are looking at paired data, and the response variable would be the difference in the number of larvae surviving between the choice...

How did expanding trade affect town life in the later Middle Ages? How did this trade...

How did expanding trade affect town life in the later Middle Ages? How did this trade undermine the feudal order? How did it stimulate the growth of local governments and guilds? What invention spurred civic life? At the end of the Middle Ages, what had begun to disappear in Western Europe?

Nearly five years into the recovery (the recession ended 2009) corporate profits are up 50%, the...

Nearly five years into the recovery (the recession ended 2009) corporate profits are up 50%, the S&P is up 80%, but household income is down 3%. "Dropped, during the recovery," which is rare or unprecedented in economic theory. How does the actions of Congress (re-write the Constitution) to effects on labor and income distribution in the macro-economy? Geoghegan, T. (2014). Only One Thing Can Save Us. New York: The New Press.

How did the “Real Plan” work? Why was it successful? What led the central bank to...

How did the “Real Plan” work? Why was it successful? What led the central bank to introduce a crawling peg in March 1995? What were the most important developments in Brazil’s balance of payments from January 1997 to April 1998? What factors contributed to these changes? What policies did the central bank pursue in response to the BOP developments? Were the policies successful? What would you expect the effects of a devaluation or adoption of a floating exchange rate regime...

In 1 paragraph explain why Roosevelt’s bank holiday was so successful in averting further bank runs...

In 1 paragraph explain why Roosevelt’s bank holiday was so successful in averting further bank runs for the remainder of the Great Depression.

Founded nearly 50 years ago by Alfred Lester-Smith, Beautiful Clocks specializes in developing and marketing a...

Founded nearly 50 years ago by Alfred Lester-Smith, Beautiful Clocks specializes in developing and marketing a diverse line of large ornamental clocks for the finest homes. Tastes have changed over the years, but the company has prospered by continually updating its product line to satisfy its affluent clientele. The Lester-Smith family continues to own a majority share of the company and the grandchildren of Alfred Lester-Smith now hold several of the top managerial positions. One of these grandchildren is Meredith...

8. Ann deposited RM1,000 in a bank account, and 10 years later she closes out the...

8. Ann deposited RM1,000 in a bank account, and 10 years later she closes out the account, which is worth RM2,158.90. What annual rate of interest has she earned over the 10 years?

Question