Andrew Tuch, professor of law
At the dawn of the Financial Crisis of 2007-09, major investment banks stood as the elite of Wall Street. They were large-scale, publicly listed corporations providing broad-ranging financial products and services across the globe.
But as we know, their reliance on short-term funding and exposure to mortgage-related securities left them financially vulnerable and created system-wide financial risks. As their lending sources dried up, they received massive government assistance designed to avert catastrophic system-wide harms. Those investment banks that survived became bank holding companies (BHCs). These events wiped out major investment banks, prompting The Wall Street Journal to assert that “Wall Street as we’ve known it for decades has ceased to exist.”
Read the full piece at the Harvard Law School Forum.