"Too Big to Fail" – Flashcards
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Hank Paulson
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Secretary of Treasury under G. W. Bush. Former CEO of Goldman Sachs
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Richard (Dick) Fuld
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CEO Lehman Brothers. Reached out to Warren Buffet, Bank of America, and negotiated with Koreans, and Barclays
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Ben Bernanke
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Chairman of Federal Reserve, Oversees banking transactions in US
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Neel Kashkari
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Assistant to Secretary of Treasury for International Affairs
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Michele Davis
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Assistant to Secretary of Treasury for Public Affairs
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Timothy Geithner
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President of Federal Reserve Bank of New York. Now Secretary of Treasury under Barack Obama.
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Chris Flowers
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Bank Takeover Expert
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Jim Wilkinson
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Chief of Staff Treasury
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Christopher Cox
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SEC Chairman
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Jamie Dimon
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CEO JPMorgan Chase
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Lloyd Blankfein
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CEO Goldman Sachs
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John Mack
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CEO Morgan Stanley- Bought by Mitsubishi
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John Thain
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CEO Merrill Lynch- Bought by Bank of America
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Sir Callum McCarthy
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British Banking Regulator
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Vikrom Pandit
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CEO Citigroup
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Sheila Bair
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Chairman of Federal Depositary Insurance Company
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Bailout
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Very large purchase assistance package
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Senior Management Exchange
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to restore public confidence by faking a change in leadership
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AIG
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Insurance, Real Estate, and cant pay back their policies. Insured banks that gave out risky loans/mortgages.
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TARP
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Trouble Asset Relief Program, This bill did not pass through the house, so they needed to ask for money in a different way
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Cash for Trash
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Buy toxic assets from banks in hope that when they rebound it will make money
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Cash Injections
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Plan after TARP was rejected, the idea was for the banks to lend out more money and jumpstart the frozen market, but instead the banks kept the money.
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Strong vs. Weak
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All banks need to take money from government so public doesn't view a particular bank as weak.
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Commercial Bank
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Individuals can have checking accounts
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Investment Bank
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Investments NOT checking accounts
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Globalization
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The American economy hurt the European banks as well and was not just an American problem.
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Risky Mortgages
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Banks do risky mortgages to make money and AIG backed the banks thinking that the housing market would go up, but instead it went down.
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Great Depression vs. Economy Crash
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Great Depression- Market Crash & Freeze of credit/loans Economy Crash- Real Estate Crash & Freeze of credit/loans
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Bailed out before Legislation
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Fannie Mae, Freddie Mac, Behr Sterns, and AIG.
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JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, Merrill Lynch
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5 Investment Banks who were apart of TARP and received 125 Billion (Cash Injections).
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77
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10 banks hold __% of total US wealth
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Credit Default Swap
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Insurance purchased to cover loans that go bad
