Financial Economics

financial intermediaries

Financial Intermediaries

Afinancial intermediary is a financial institution that connects surplus and deficit agents. The classic example of a financial intermediary is a bank that consolidates deposits and uses the funds to transform them into loans. The job of financial intermediaries is to connect borrowers to savers. For example, A bank loan is a form of indirect...
Provisions in the Glass-Steagall Act

The Glass-Steagall Act

The Glass-Steagall Act (1933) separated depository institutions from investment banks and limited securities, activities, and affiliations within commercial banks and securities firms. In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the...
banking regulations in the united states

Banking Regulation in the United States

The United States has imposed has created banking regulation to prevent unnecessary damage to confidence and liquidity in the financial system. The regulations are meant to prevent things like bank runs, credit crunches, and financial crises. Reasons for Banking Regulation in the U.S. 1. Bank Runs Bank runs occur due to fears of insolvency. For this...
implications of the mcfadden act

Implications of the McFadden Act

The McFadden Act (1927 – 1994) was appealed by the Riegle-Neal Interstate Banking and Branching Efficiency Act. The Act made national banks competitive against state-chartered banks by letting national banks add more branches to the extent permitted by state law. The McFadden Act specifically prohibited interstate branching by allowing each national bank to branch only within the state...
introduction to the stock market

Introduction to the Stock Market

In a long position, the owner benefits when the stock or share gains in value. The potential profit is unlimited. So the “long” position is said to be “bullish.” When the stock is down, the most that the owner can lose is the amount of money he has originally paid for it. Since it is impossible to lose...
introduction to the federal reserve

Introduction to the Federal Reserve

The Federal Reserve or the Fed is the central bank of the United States of America. The Federal Reserve is a network of 12 regional Federal Reserve banks, but the Fed’s power centre is in its New York bank. The Fed's Liabilities: Commercial banks’ reserves, government deposits and mostly dollar bills The Fed Assets: Emergency discount loans to banks and government securities....

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