Gramm-Bliley Act Pros And Cons
The Glass-Steagall Act came as an acrid medicine to the notorious US financial sector post the ’29 stock market crash. The Commercial and Investment banks were prohibited from mating, risking the depositor’s money, and gambling or securitising rotten assets or loans. Seen as regressive by the overly-ambitious Americans, the Act was kicked-out by Gramm-Leach-Bliley Act ’99 that permitted the unison of commercial & investment banks, unperturbed at all levels, allowing them further to risk the depositor’s money by turning it into Collateralised Debt Obligation(s). With 2008 Crisis, history had repeated itself. Goldman Sachs, and all the banks alike were upholders of deregulation of this kind. Continuing from Bush’s policy to gift every Joe …show more content…
The Gramm-Leach-Bliley Act gave banks the authority to underwrite. This gave both, power and great responsibility to the investment banks since they became the reps of those CDO’s (which were at core bad debts of incapable homebuyers). They did not flag the reality to their investors till the last day (final date of crash), moreover, iced it with Triple-As. They stood for service and honesty towards their clients but knowing the shallowness of the investment they only sought to insure …show more content…
It slapped a fine of half a billion on Goldman Sach’s in July, 2010. The bank admitted on floor that it rubbed out important information from the Abacus subprime-mortgage derivative it had vended 3 years ago, also acknowledged the role of John Paulson (Hedge Fund mgr.) in choosing securities that went to synthetic CDOs. SEC accused Goldman on breaching sub-section 2 & 3 of Section 17(a) of the Securities Act, both of which are easy to prove without any proof of intent or so of fraud, unlike Section 17(1a) & Section 10(b) of Exchange Act (which were initial complaints of Plaintiffs). This changed the nature of GS’s violation from fraud to “misleading” sales due to omission of information, thus, saving grace for Goldman’s repute. It had earned profits of $3.56bn in first 3 quarters of the year, $550mn was a petty fine. If Goldman committed misconduct then, so did the Federal Reserve Chairman, Regulators, Credit-Rating-Agencies, US Presidents, Stalwart-Economists/Analysts, and World’s Financial Moguls. Goldman Sach’s or PlatinumLady Bag’s, anyone would capitalize on unhealthy and unchecked markets. Why surprised when investment banks, as it, did exactly what they are here to do -mint
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In Wells Fargo Scandal, The Buck Stopped Well Short Summary
498 Words | 2 PagesMs. Tolstedt decided to retire in July, 2016 when the investigation was moving toward finality. Wells Fargo allowed Ms. Tolstedt to retire and take with her around $125 million in stock options while around 5300 of her former employees are getting fired for their part of the fraudulent activities. The author feels Wells Fargo did an injustice to society and Ms. Tolstedt’s former employees by allowing her to retire and take all of her stock options with her, since she should have been
Pros And Cons Of The Glass Margall Act
1578 Words | 7 PagesThe term Glass–Steagall Act typically refers to four provisions of the U.S. Banking Act of 1933 that restricted banking company securities activities and affiliations among industrial banks and securities corporations. General assembly efforts to “repeal the Glass–Steagall Act” spoken those four provisions (and then typically to solely the 2 provisions that restricted affiliations between industrial banks and securities corporations). Those efforts culminated within the 1999 Gramm–Leach–Bliley Act (GLBA) that repealed the 2 provisions limiting affiliations between banks and securities corporations. The term Glass–Steagall Act is additionally typically accustomed talk over with the complete Banking Act of 1933, when its general assembly sponsors,
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1980s Savings And Loan Crisis
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