Changes

'''Financial Holding Companies''' ('''FHCs''') were created with passage of the Gramm-Leach-Bliley Act, which also repealed parts of the [[Glass-Steagall Act]].  

'''Financial Holding Companies''' ('''FHCs''') were created with passage of the Gramm-Leach-Bliley Act, which also repealed parts of the [[Glass-Steagall Act]].  

The formal repeal of Glass=Steagall was recognition of changesthat had already taken place, such as the [[Federal Reserve]]s' revision of Regulation Y, making it easier for Bank Holding Companies with a satisfactory [[Community Reinvestment Act]] (CRA) rating to receive quicker approval for new acquisitions and engage in other activities.<ref>[http://www.frbsf.org/publications/community/investments/cra97-3/regy.html Regulation Y Revised - Changes to the Federal Reserve Application Process,] Community Investments, Volume 9; No. 3; Summer 1997, By Mike Johnson, Applications Officer, Federal Reserve Bank of San Francisco.</ref>   

The formal repeal of Glass-Steagall was recognition of changes that had already taken place, such as the [[Federal Reserve]]s' revision of Regulation Y, making it easier for Bank Holding Companies with a satisfactory [[Community Reinvestment Act]] (CRA) rating to receive quicker approval for new acquisitions and engage in other activities.<ref>[http://www.frbsf.org/publications/community/investments/cra97-3/regy.html Regulation Y Revised - Changes to the Federal Reserve Application Process,] Community Investments, Volume 9; No. 3; Summer 1997, By Mike Johnson, Applications Officer, Federal Reserve Bank of San Francisco.</ref>   

The Glass-Steagall Act regulating Bank Holding Companies (BHCs) and passed during the [[Great Depression]]. The new law let commercial and investment banks to merge with insurance companies into newly created financial holding companies, and allowed for [[proprietary trading]] on their own behalf. FHCs could be encumbered with the bad debts and risky investments non-banks held and BHCs specifically had to stay away from under Glass-Steagall. The result was "too big to fail" behemoths like Citigroup.  

The Glass-Steagall Act regulating Bank Holding Companies (BHCs) and passed during the [[Great Depression]]. The new law let commercial and investment banks to merge with insurance companies into newly created financial holding companies, and allowed for [[proprietary trading]] on their own behalf. FHCs could be encumbered with the bad debts and risky investments non-banks held and BHCs specifically had to stay away from under Glass-Steagall. The result was "too big to fail" behemoths like Citigroup.  

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[[Category:Economics]]

[[Category:Economics]]