Lesson 1
Commercial And Investment Bank
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First, Professor Shiller discusses today's changing financial system and recent market stabilization reform introduced by U.S. Treasury Secretary Henry Paulson. The financial system is inherently unstable and would benefit from more surveillance. Second, Professor Shiller introduces the mechanics and role of investment banking. Investment banks underwrite securities and arrange for the issue of stocks and bonds by corporations. Corporations work with investment banks to navigate the Securities and Exchange Commission requirements for issuing securities. The banks then take on a "bought deal" or "best efforts deal" and help the corporation to find a market for the securities. Shiller, Robert J. ECON 252, Financial Markets (2008), Spring 2008. Yale OpenCourseWare: Economics, Accessed 23/9/14 http://oyc.yale.edu/economics/econ-252-08/lecture-17 License: Creative Commons BY-NC-SA

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