Long-Term Capital Management L.P. (LTCM) was a highly leveraged hedge fund. In 1998,it received a $3.6 billion bailout from a group of 14 banks,in a deal brokered and put together by the Federal Reserve Bank of New York.
In finance,speculation is the purchase of an asset with the hope that it will become more valuable shortly. It can also refer to short sales in which the speculator hopes for a decline in value.
Alan Greenspan is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He worked as a private adviser and provided consulting for firms through his company,Greenspan Associates LLC.
The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets.
The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets,which includes futures,swaps,and certain kinds of options.
The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that ensured financial products known as over-the-counter (OTC) derivatives remained unregulated. It was signed into law on December 21,2000 by President Bill Clinton. It clarified the law so most OTC derivative transactions between "sophisticated parties" would not be regulated as "futures" under the Commodity Exchange Act of 1936 (CEA) or as "securities" under the federal securities laws. Instead,the major dealers of those products would continue to have their dealings in OTC derivatives supervised by their federal regulators under general "safety and soundness" standards. The Commodity Futures Trading Commission's (CFTC) desire to have "functional regulation" of the market was also rejected. Instead,the CFTC would continue to do "entity-based supervision of OTC derivatives dealers". The CFMA's treatment of OTC derivatives such as credit default swaps has become controversial,as those derivatives played a major role in the financial crisis of 2008 and the subsequent 2008–2012 global recession.
Robert Edward Rubin is an American retired banking executive,lawyer,and former government official. He served as the 70th U.S. Secretary of the Treasury during the Clinton administration. Before his government service,he spent 26 years at Goldman Sachs,eventually serving as a member of the board and co-chairman from 1990 to 1992.
Large and complex financial institutions (LCFI) are systemically important financial institutions,also referred to colloquially as bulge bracket banks,that if they failed would cause a Systemic banking crisis. The term is used in the context of systemic risk which concerns central banks,financial regulators and the Bank for International Settlements and has led to the term too big to fail.
Bankers Trust was a historic American banking organization. The bank merged with Alex. Brown &Sons in 1997 before being acquired by Deutsche Bank in 1999. Deutsche Bank sold the Trust and Custody division of Bankers Trust to State Street Corporation in 2003.
The 2000s United States housing bubble or house price boom or 2000shousing cycle was a sharp run up and subsequent collapse of house asset prices affecting over half of the U.S. states. In many regions a real estate bubble,it was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006,started to decline in 2006 and 2007,and reached new lows in 2011. On December 30,2008,the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.
Sheila Colleen Bair is an American former government official who was the 19th Chair of the U.S. Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011,during which time she shortly after taking charge of the FDIC in June 2006 began warning of the potential systemic risks posed by the growing trend of subprime-mortgage-backed bonds,and then later assumed a prominent role in the government's response to the 2008 financial crisis. She was appointed to the post for a five-year term on June 26,2006,by George W. Bush through July 8,2011. She was subsequently the 28th president of Washington College in Chestertown,MD,the first female head of the college in its 234-year history,a position she held from 2015 until her resignation in 2017.
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations,particularly financial institutions,are so large and so interconnected that their failure would be disastrous to the greater economic system,and therefore should be supported by government when they face potential failure. The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing,discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois. The term had previously been used occasionally in the press,and similar thinking had motivated earlier bank bailouts.
The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations,as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States,such as bankruptcies and takeovers,and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see 2007–2008 financial crisis.
The Great Recession was a period of market decline in economies around the world that occurred in the late 2000s. The scale and timing of the recession varied from country to country. At the time,the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.
Regulatory responses to the subprime crisis addresses various actions taken by governments around the world to address the effects of the subprime mortgage crisis.
Government policies and the subprime mortgage crisis covers the United States government policies and its impact on the subprime mortgage crisis of 2007-2009. The U.S. subprime mortgage crisis was a set of events and conditions that led to the 2007–2008 financial crisis and subsequent recession. It was characterized by a rise in subprime mortgage delinquencies and foreclosures,and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008,with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
The Financial Crisis Inquiry Commission (FCIC) was a ten-member commission appointed by the leaders of the United States Congress with the goal of investigating the causes of the financial crisis of 2007–2008. The Commission has been nicknamed the Angelides Commission after the chairman,Phil Angelides. The commission has been compared to the Pecora Commission,which investigated the causes of the Great Depression in the 1930s,and has been nicknamed the New Pecora Commission. Analogies have also been made to the 9/11 Commission,which examined the September 11 attacks. The commission had the ability to subpoena documents and witnesses for testimony,a power that the Pecora Commission had but the 9/11 Commission did not. The first public hearing of the commission was held on January 13,2010,with the presentation of testimony from various banking officials. Hearings continued during 2010 with "hundreds" of other persons in business,academia,and government testifying.
The 2007–2008 financial crisis,or the global financial crisis (GFC),was the most severe worldwide economic crisis since the Great Depression. Predatory lending in the form of subprime mortgages targeting low-income homebuyers,excessive risk-taking by global financial institutions,a continuous buildup of toxic assets within banks,and the bursting of the United States housing bubble culminated in a "perfect storm",which led to the Great Recession.
Rostin Behnam(born February 16,1978) is an American lawyer and government official who currently serves as the 15th chairman of the Commodity Futures Trading Commission (CFTC). Prior to leading the CFTC,he served as one of five-member CFTC commissioners,having been nominated on July 13,2017 by President Donald Trump to fulfill a term expiring June 19,2021. Behnam was unanimously confirmed by the Senate on August 3,2017,and sworn in as commissioner on September 6,2017. On January 21,2021,the commission members unanimously elected Behnam to be acting chairman following President Joe Biden' s inauguration and the resignation of Heath Tarbert,who served as chairman since July 15,2019. Behnam was re-nominated by President Biden as a commissioner,and simultaneously nominated to chair the agency for a new 5-year term through June 19,2026. Behnam was unanimously confirmed by the Senate on December 15,2021,and sworn in as CFTC's chairman and chief administrative officer on January 4,2022.
Thomas A. Russo is an American attorney and former Wall Street executive. He was vice chairman and chief legal officer of Lehman Brothers and general counsel for American International Group (AIG),two of the companies that played a major role in the 2007–2008 financial crisis.
