Securities units of banking conglomerates: should their location be regulated?

Article Abstract:

A growing number of commercial and investment banks are offering securities products. This practice is considered legal as long as the banks involved confine their securities activities in a separate capitalized unit. Most banks prefer to adopt a bank parent model rather than a holding company model. However, such a choice would reduce the Federal Reserve Systems' (Fed) crises management powers. To remedy this, regulations should be passed that would maintain the Fed's supervisory role, at the same time, allow the banks to maximize their gains through free choice of organizational model.

Banking industry, Conglomerate corporations, Laws, regulations and rules, Investment banks, Securities, Powers and duties, United States. Federal Reserve System. Banking Supervision and Regulation Division

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The origin of Mexico's 1994 financial crisis

Article Abstract:

The main cause of the financial crisis experienced by Mexico in 1994 is the unrealistic expansion of its credit. This, in turn, stemmed from excessive confidence in the steadily improving national economy from 1989 to 1993. Lax measures were used in selecting borrowers resulting in the rise of bad debts. The resulting current-account deficit was financed by short-term debt. As foreign reserves were drained, the fixed foreign exchange rate collapsed.

Analysis, Economic aspects, Mexico, Monetary policy, Credit, Currency devaluation, Devaluation (Currency), Bad debts, Credit management, Short-term financing, Short term financing, Foreign exchange reserves, Depressions, Economic depressions

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