Changes to the US banking industry review

Module 4 discusses the changes to the US banking industry that occurred during the 1990s and into the early 2000s. These were the first major changes in decades. The prior major change was the introduction of the Glass-Steagall Act in the 1930s, and the changes discussed in the module essentially undid much of that act.

One of the key elements in Glass-Steagall was the separation of investment banking and commercial banking activities (Heakal, 2015). One of the reasons for this separation was that investment banking was inherently more speculative, and there was a recognition following the 1929 stock market crash that even if investment banking suffered significant volatility, the nation’s economy relies on having a stable commercial banking environment. Olson (2002) noted that the 1999 Gramm-Leach-Billey Act basically dismantled Glass Steagall.

Don't use plagiarized sources. Get Your Custom Essay on
Changes to the US banking industry review
Just from $9/Page
Order Essay

One of the other key things that Glass Steagall prevented was investment bank speculation in commercial activities, such as residential real estate. The backdrop to this study is that after Gramm-Leach-Billey, investment banks began to seek out commercial banking income, not as much by buying commercial banks, but by creating investment funds in real estate. The commercial banking and real estate markets were completely unprepared for this influx of capital, and by Olson (2002) so was the Federal Reserve. A radical change in residential real estate markets occurred, and the outcome was basically that a lot of speculative money went into real estate, new investment vehicles were created and sold, but the market did not fully understand these vehicles or their risk.

There are certainly other factors –bond rating agencies also did not effectively convey the risk of these vehicles – but this was a major cause of the financial implosion in 2007-2009. These investments grew rapidly because of low interest rates that made housing affordable for many, but ultimately the risks of these products were revealed, and this created chaos not just in residential real estate but for any institution, government or investor holding a significant amount of these products in their portfolio.


The first three modules look at different aspects of the financial system. The first module is interesting in that it covers buyer behavior in terms of payments, in particular the adoption of new payment formats. As we shift from a cash society, to one where card payment is common, there are all these emerging new payment forms and these are changing the way that consumers behave because they lower barriers to making transactions.

Module 2 talks about banking regulations, going back to the creation of the Federal Reserve, Glass-Steagall, and eventually Gramm-Leach-Billey, and Dodd-Frank. One of the key roles of regulation is to ensure investor and consumer confidence in the banking system, but there seems to always be this tug between doing that and allowing banks to pursue innovation and new profit opportunities. There is a case discussion about United Federal Credit Union, as a different sort of retail banking model, owned by the members instead of shareholders, and how the credit union has had to evolve to meet the needs of its owner/customers.

Module 3 discusses the role of money in our economy, and in particular things like inflation that can devalue the role of money. It is important to contain inflation in order to preserve people’s wealth – inflation is a key factor in individual investment decisions, although there are certainly other factors as well.

All of these elements go into what our banking system looks like, and how we as individual interact with the banking system, in our daily lives. This is valuable information because it informs us of why banking regulation and banking issues are important – the different ways that they can affect us.


Module 4 Class Discussion


Part 1:


I am certainly concerned about the possibility of inflation. The large amounts of stimulus, especially the successive rounds of quantitative easing, were intended to kickstart the economy. With a lower cost of capital, firms would be more willing to take risk. However, just because an American firm has easy access to capital does not mean that they will spend that money in the United States. Capital moves around the world fairly freely, which means that a company can borrow in the US and then invest overseas. American companies are some of the most international anywhere, so this is a real possibility – that these companies will pursue growth where they find it, not necessarily in the US.

Because of that, I see risk in pumping too much money into the US financial system right now. It may not help with unemployment as much as is desired, which means there might be a lot more quantitative easing, lasting for several years. I feel that this could tip into the realm of too much stimulus, which would create inflationary pressure.

Further, if there are weak impacts on unemployment, the Fed will be hesitant to raise rates in order to address that inflationary pressure. It seems reasonable that they would fear harming employment, even at a time when there is clear inflationary pressure. So while the Fed has the tools that it needs to manage the economy, there may be political implications that make it hesitant to wield the full force of these tools. Instead, the Fed might continue to pump money into the economy for longer than it should, if faced with a choice between inflation and unemployment. So there is a need for this new money to be focused, more in terms of fiscal policy, than to simply come from monetary policy, where the Fed cannot actually control how it is used.



References (1998). Understanding how Glass-Steagall Act impacts investment banking and the role of commercial banks. Retrieved October 28, 2017 from

Heakall, R. (2015) What was the Glass-Steagall Act? Investopedia. Retrieved October 28, 2017 from


Olson, (2002) Remarks by Governor Olson. Federal Reserve Bank of St. Louis. Retrieved October 28, 2017 from

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper

Our Free Services
  • Access to a pool of expert academic writers
  • Experienced Academic writers
  • Timely delivery
  • Any kind of assignment
  • Subject-relevant academic writer
  • Full compliance with instructions
  • Direct communication with your writer
  • Get superb grades consistently