Tag Archives: Bank

05/16/11

Banking on that Regulation

In 2009, Obama proposed to make stricter regulations in the financial sector. AIG was an insurance giant company that has major influence all over the world. It’s failure would destroy the financial system. Obama proposes that the government be able to seize companies in order to save them. This stricter regulation would hopefully bring a check to other companies.

During the 1980’s, there was a movement pushing for government to have deregulate the financial sector. Some acts proposed allowed firms to take part in competition in traditional banks, investment bansk and insurance companies. There was also the creation of credit default swaps which was the reason why AIG failed. Many people blame the crisis in 2008 due to the deregulation from the government in the financial sector.

Source: 

http://articles.latimes.com/2009/jun/16/business/fi-financial-regs16

http://en.wikipedia.org/wiki/Deregulation

02/27/11

The Birth of the Federal Reserve System

The Panic of 1907 was a financial crisis, which almost left the nation’s banks in ruins. Therefore, on December 23, 1913, President Woodrow Wilson signed the Federal Reserve Act. This act established the Federal Reserve System, the nation’s very own bank that would overlook and monitor the nation’s monetary policy. The president has the power to nominate the central board, which in turn would monitor the 12 regional banks spanned across the country. The Federal Reserve has the abillity to issue money, control interest rates, and bail out banks in slump.