The Economics and Financial Education Program

  A Perfect Storm Brewing: The Looming Threat of Protectionism The winds of protectionism are stirring, threatening to upend the delicate balance of the global economy. A scenario where the United States, the world's economic titan, imposes sweeping tariffs and trade barriers on its trading partners is not merely a hypothetical exercise, but a stark warning of the potential for financial catastrophe. We stand on the precipice of a new era of economic uncertainty. The intricate web of global supply chains, painstakingly woven over decades, could unravel, leading to a domino effect of economic disruption. The specter of a trade war looms large, casting a long shadow over markets and economies alike. As financial professionals, we must confront this looming threat with a keen eye and a clear mind. We must dissect the complex interplay of economic forces, assess the potential risks to our portfolios, and devise strategies to navigate this turbulent landscape. The stakes are high, and t...

  The financial system, like a pendulum, perpetually swings between the poles of deregulation and reregulation. This cyclical dance, fueled by economic booms, busts, and political ideologies, has shaped the landscape of finance for centuries. While each swing offers distinct advantages and disadvantages, the long-term consequences of this pendulum's motion remain a subject of intense debate and speculation.   Deregulation, the loosening of government control over financial markets, often leads to a surge in innovation and economic growth. Financial institutions, unburdened by restrictive regulations, are free to experiment with new products and services, fostering competition and driving down costs for consumers. The 1980s and 1990s witnessed a period of significant deregulation in the United States, leading to the rise of financial derivatives, securitization, and other complex financial instruments. This era was marked by a boom in financial innovation, attracting global...

  A Perfect Storm The financial crisis of 2008, also known as the Global Financial Crisis (GFC), was a severe worldwide economic crisis that occurred in the late 2000s. It is considered by many economists to have been the most serious financial crisis since the Great Depression (1929). The crisis led to the collapse of large financial institutions, the bailout of banks by national governments, and had a devastating impact on the global economy. Let’s explore the causes and effects of this monumental event. Causes of the Crisis The financial crisis of 2008 was caused by a confluence of factors, but at the root lay the surge in subprime mortgages. Subprime mortgages are loans issued to borrowers with poor credit histories. These subprime mortgages were often bundled into mortgage-backed securities (MBS) and sold to investors.   In the lead-up to the crisis, lenders, fueled by the belief that housing prices would continue to rise indefinitely, loosened lending standards a...

  Introduction There are currently 4,012 commercial banks in the United States as of the first quarter of 2024. The banking industry can be characterized as a complex ecosystem composed of various types of financial institutions, each serving distinct roles and catering to different customer needs. Among these institutions, community banks, regional banks, and money center banks stand out due to their unique characteristics and operational scopes. Understanding the differences between these types of banks is essential for consumers, businesses, and policymakers alike. Table 1. Size Distribution of Insured Commercial Banks, First Quarter 2024 Assets Number of Banks Share of Banks (%) Total Assets (in billions) Share of Assets Held (%) Total Deposits (in billions) Share of Deposits Held (%) Less than $100 million        ...