The Glass-Steagall Act (MBS) Of 1930's

In Investdopedia, a mortgage-backed security (MBS) is best defined, “A type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.” This is the simplest was of think about what a MBS is. The credit default swap (CDS) is a swap a swap intended to transfer the credit exposure of fixed income products between parties. It has also referred to as a credit derivative, where the purchaser of the swap makes payments up until the maturity

The likelihood that significant economic changes in one country will spread to other countries has become a more prominent phenomenon as the global economy has grown. Economies within certain geographic regions have become more correlated with one another. The Glass-Steagall Act (GSA) of 1930’s was created because of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression. This act is named after two members of Congress. This act separated investment and commercial banking activities. At the time, improper banking activity, or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money. The full name of the bill is the Dodd-Frank Wall street Reform and Consumer Protection Act, but it is better known and most often referred to as Dodd-Frank. IN simple terms, Dodd-Frank is a law that places major regulations on the financial industry. Born out of the Great Recession of 2008. Laws were made with financial institution like Lehman Brothers. Some regulations where as follows: created the Financial Stability Oversight Council (FSOC); the Volcker Rule: the Whistle blower provision just to name a