How Powerful Is Wall Street?
Since the Occupy Wall Street movement of 2011 gained national interest, Wall Street has taken center stage on the political radar.
candidates Bernie Sanders, and Hillary Clinton, have rallied against Wall Street’s disproportionate influence in the US and global economy.
in common use, “Wall Street” refers to the American banking industry.
The term is used because Wall Street in New York City is the location of significant financial markets, including the NASDAQ and the New York Stock Exchange.
These two markets are the largest exchanges in the world, and facilitate the trade of more than $27 trillion dollars of company stock.
Changes in the global economy are directly reflected in the performance of these stock markets, and vice-versa.
But stock market capitalization isn’t necessarily a measurement of power, as that money is actually held by investors and not specifically Wall Street banks.
By comparison, US financial institutions hold roughly $15 trillion dollars in assets, half of which is controlled by just five banks That’s almost the United States’ entire yearly GDP; the largest in the world.
A 2009 study by the Center for Economic and Policy Research found that banking deregulation in the United States was heavily pushed by banks themselves by way of financial lobbyists.
Deregulation in the 1970s and 1980s was based on the idea that removing government oversight of the financial system would allow it to flourish, and Wall Street’s profits would trickle down to Main Street.
In fact what ended up happening was that financial deregulation allowed banks and lenders to take on riskier loans, as well as bet on the stock market using customer money.
during the late-2000s financial crisis, where it came out that poorly regulated banks were offering massive mortgages to people who were unable to pay them.
So when the housing market finally collapsed under the weight of these bad loans, it took down the world’s financial markets as well.
In short, Wall Street’s practices contributed to the downturn in the global economy. That’s pretty powerful.
Instead of letting the affected financial institutions fail under the weight of their bad loans, they were bailed out with public money.
The Treasury department committed roughly $16 trillion dollars, a bailout led by Henry Paulson, the Secretary of the Treasury.
Paulson was also the former CEO of Goldman Sachs, which received nearly $13 billion dollars as part of the bailout.
Wall Street has a huge amount of money, a huge amount of influence, and even former CEOs in government positions.
candidates Bernie Sanders, and Hillary Clinton, have rallied against Wall Street’s disproportionate influence in the US and global economy.
in common use, “Wall Street” refers to the American banking industry.
The term is used because Wall Street in New York City is the location of significant financial markets, including the NASDAQ and the New York Stock Exchange.
These two markets are the largest exchanges in the world, and facilitate the trade of more than $27 trillion dollars of company stock.
Changes in the global economy are directly reflected in the performance of these stock markets, and vice-versa.
But stock market capitalization isn’t necessarily a measurement of power, as that money is actually held by investors and not specifically Wall Street banks.
By comparison, US financial institutions hold roughly $15 trillion dollars in assets, half of which is controlled by just five banks That’s almost the United States’ entire yearly GDP; the largest in the world.
A 2009 study by the Center for Economic and Policy Research found that banking deregulation in the United States was heavily pushed by banks themselves by way of financial lobbyists.
Deregulation in the 1970s and 1980s was based on the idea that removing government oversight of the financial system would allow it to flourish, and Wall Street’s profits would trickle down to Main Street.
In fact what ended up happening was that financial deregulation allowed banks and lenders to take on riskier loans, as well as bet on the stock market using customer money.
during the late-2000s financial crisis, where it came out that poorly regulated banks were offering massive mortgages to people who were unable to pay them.
So when the housing market finally collapsed under the weight of these bad loans, it took down the world’s financial markets as well.
In short, Wall Street’s practices contributed to the downturn in the global economy. That’s pretty powerful.
Instead of letting the affected financial institutions fail under the weight of their bad loans, they were bailed out with public money.
The Treasury department committed roughly $16 trillion dollars, a bailout led by Henry Paulson, the Secretary of the Treasury.
Paulson was also the former CEO of Goldman Sachs, which received nearly $13 billion dollars as part of the bailout.
Wall Street has a huge amount of money, a huge amount of influence, and even former CEOs in government positions.
Comments
Post a Comment