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After the 2008 financial crisis and the failure/need for bailing out stand-alone investment banks, they chose to be converted to a bank holding company to gain access to FDIC insured deposits, and FED emergency lending facilities 

Conflicts of interest are not a potenital issue in investment banking 

Securities brokers earn a commission taking on no price risk vs dealers who carry an inventory of securities taking on on price risk/earning a spread between between their bid purchase price and ask sale price

Their is both a legal an illegal shadown banking system

Banks have an advantage in originating loans, but not in funding loans due to FDIC deposit insurance premiums, loan loss reserve provisions, and meeting minimum capital standards 

Check (X) which of the following factors CONTRIBUTED to the excessive run up in housing prices from 2002-2006, which helped create a real estate bubble and the subsequent 2008 Financial Crisis, check (O) if the factor did not: [a1] Creative, high risk subprime mortgage financing programs [a2] Increase in traditional mortgage financing programs [a3] Financial “engineering/innovation” of subprime CDO’s (Collateralized Debt Obligations) [a4] Speculative investors “flipping” homes [a5] Predatory lending practices taking advantage of ill-informed borrowers [a6] Greed, dishonesty, conflicts of interest [a7] Government mandated affordabl housing program [a8] High interest rates [a9] Strict underwriting standards [a10] Unregulated/unsupervised CDS’s (Credit Default Swaps) [a11] A “originate to distribute” fee driven based incentive payment system [a12] Informed consumers knowingly using high risk, creative financial programs to buy homes [a13] Wall Street Banks reliance on mathematical modeling for predicting the default rate for subprime loans [a14]Strict, timely regulatory supervision and enforcement actions [a15] Increase in loans to high-risk first time and hard to verify cash flow buyers [a16] Lack of due diligence by investors purchasing subprime CDO’s from investment banks [a17] FED keeping rates low too long contributing to an asset-driven credit bubble

Daily Survival Kit Which of these (toothpick, eraser, pencil, rubber band) are u currently using or plan to use in the future?  

Shadow banking has the same liquidity and capital requirements as traditional banks 

The Money Market is used to invest/borrow short term vs the Capital Market used to financing long-term needs 

The clause under the Sarbanes-Oxley Act of 2002 making it unlawful for a registered public accounting firm to provide non-audit services to a client contemporaneously with providing audit services is an example of separation of functions to prevent a conflicit of interest