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Definition of 'Collateralized Debt Obligation - CDO'

The Glass-Steagall Act was passed in 1933 as part of the Banking Act to prohibit commercial banks from participating in investment banking in response to the thousands of bank failures during the Great Depression. It was sponsored by Senator Carter Glass and Senator Henry Steagall and aimed to counter the effects of the financial crisis. Though its effectiveness declined over time, Glass-Steagall was not fully repealed until 1999.

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84 views2 pages

Definition of 'Collateralized Debt Obligation - CDO'

The Glass-Steagall Act was passed in 1933 as part of the Banking Act to prohibit commercial banks from participating in investment banking in response to the thousands of bank failures during the Great Depression. It was sponsored by Senator Carter Glass and Senator Henry Steagall and aimed to counter the effects of the financial crisis. Though its effectiveness declined over time, Glass-Steagall was not fully repealed until 1999.

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Yadav412
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Definition of 'Glass-Steagall Act'

An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited
commercial banks from participating in the investment banking business. The
Glass-Steagall Act was sponsored by Senator Carter Glass, a former Treasury
secretary, and Senator Henry Steagall, a member of the House of Representatives
and chairman of the House Banking and Currency Committee. The Act was passed
as an emergency measure to counter the failure of almost 5,000 banks during the
Great Depression. The Glass-Steagall lost its potency in subsequent decades and
was finally repealed in 1999.


Definition of 'Collateralized Debt Obligation - CDO'

A structured financial product that pools together cash flow-generating
assets and repackages this asset pool into discrete tranches that can be sold
to investors. A collateralized debt obligation (CDO) is so-called because the
pooled assets such as mortgages, bonds and loans are essentially debt
obligations that serve as collateral for the CDO.


Definition of 'Hedge Fund'

An aggressively managed portfolio of investments that uses advanced investment
strategies such as leveraged, long, short and derivative positions in both domestic
and international markets with the goal of generating high returns (either in an
absolute sense or over a specified market benchmark).

Legally, hedge funds are most often set up as private investment partnerships that
are open to a limited number of investors and require a very large initial minimum
investment. Investments in hedge funds are illiquid as they often require investors
keep their money in the fund for at least one year.
2007 2008 2009 2010
$ 45.99 bn $ 22.22 bn $ 45.17 bn $ 39.2 bn
Depreciation Dec by 50% Inc by 50% Dec by 11%
$ 11.60 bn $ 2.32 bn $ 13.39 bn $ 8.35 bn
Depreciation

GS purchased some $ 20 billion in CDSs from AIG

Troubled Asset Relief Program

The Troubled Asset Relief Program (TARP) is a program of the United
States government to purchase assets and equity from financial institutions
to strengthen its financial sector that was signed into law by U.S. President
George W. Bush on October 3, 2008


Definition of 'Troubled Asset'

Assets for which banks have overpaid such as loans that are made to
borrowers who cannot afford to pay these loans back. Troubled assets
are often secured by collateral that is valued less than the value of the
loan itself. These personal or commercial loans were made to borrowers
to cover the cost of homes, automobiles, equipment or various other
items of value.

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