Geography 3422A/B Study Guide - Bear Stearns, Mbia, Commodity Futures Trading Commission
26 Mar 2013
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Lehman brothers bankruptcy initiated the stock market collapse. After the great depression the us had 40 years of steady growth without any major disruptions. Investment banks used to be small partnerships. Paul volcker chairman of the federal reserve 1979-1987. 1980 investment banks went public giving them large amounts of money in stocks. Keeting to invest his customers money, keeting went to prison, but greenspan was appointed chairman of the federal reserve. The merger was found to be illegal by an act passed after the great depression (glass-steagall) which restricted investment banks from engaging in risky banking practices. Greenspan was able to put off the law suit for a year, in which time the gramm-leach-bliley act, known as the. Citigroup relief act was passed that trumped the. Glass-steagall act and cleared the way for future mergers. Eliot spitzer governor of ny state: investigation revealed that investment banks had promoted internet companies they knew would fail.
