A Brief History of Banking Reform After the New Deal

As president of the United States during the Great Depression, one of President Franklin D. Roosevelts primary policy goals was to address issues in the banking industry and financial sector. FDRs New Deal legislation was his administrations answer to many of the countrys grave economic and social issues of the period. Many historians categorize the primary points of focus of the legislation as the Three Rs to stand for relief, recovery, and reform. When it came to the banking industry, FDR pushed for reform. The New Deal and Banking Reform   FDRs New Deal legislation of the mid- to late-1930s gave rise to new policies and regulations preventing banks from engaging in the securities and insurance businesses. Prior to the Great Depression, many banks ran into trouble because they took excessive risks in the stock market or unethically provided loans to industrial companies in which bank directors or officers had personal investments. As an immediate provision, FDR proposed the Emergency Banking Act which was signed into law the very same day it was presented to Congress. The Emergency Banking Act  outlined the plan to reopen sound banking institutions under the US Treasurys oversight and backed by federal loans. This critical act provided much-needed temporary stability  in the industry  but did not provide for the future.  Determined to prevent these events from occurring again,  Depression-era politicians passed the Glass-Steagall Act, which essentially prohibited the mixing of banking, securities, and insuranc e businesses. Together these two acts of banking reform provided long-term stability to the banking industry. Banking Reform Backlash Despite the banking reforms success, these regulations, particularly those associated with the Glass-Steagall Act, grew controversial by the 1970s, as banks complained that they would lose customers to other financial companies unless they could offer a wider variety of financial services.  The government responded by giving banks greater freedom to offer consumers new types of financial services. Then, in late 1999, Congress enacted the Financial Services Modernization Act of 1999, which repealed the Glass-Steagall Act. The new law went beyond the considerable freedom that banks already enjoyed in offering everything from consumer banking to underwriting securities. It allowed banks, securities, and insurance firms to form financial conglomerates that could market a range of financial products including mutual funds, stocks and bonds, insurance, and automobile loans. As with laws deregulating transportation, telecommunications, and other industries, the new law was expected to gen erate a wave of mergers among financial institutions. Banking Industry Beyond WWII Generally, the New Deal legislation was successful, and the American banking system returned to health in the years following World War II. But it ran into difficulties again in the 1980s and 1990s in part because of social regulation. After the war, the government had been eager to foster homeownership, so it helped create a new banking sector—the savings and loan (SL) industry—to concentrate on making long-term home loans, known as mortgages. But the savings and loans industry faced one major problem: mortgages typically ran for 30 years and carried fixed interest rates, while most deposits have much shorter terms. When short-term interest rates rise above the rate on long-term mortgages, savings and loans can lose money. To protect savings and loan associations and banks against this eventuality, regulators decided to control interest rates on deposits.

Impact of Taylorism and Fordism on Management - 2026 Words

Management is a very complex field and has evolved over a long period of time. Globalization has affected every part of our lives and not even management has been spared, thus forcing new approaches to management to be developed in line with global demands. The oldest school of thought was the scientific management by Frederick Winslow Taylor. His main objective was to improve economic efficiency through application of scientific principles to labour process and establish one best way to do things. Its main impact was efficiency along with deskilling and dehumanisation of workers. Fordism was another school named after Henry Ford after spending much devising ways improving productivity of automobile companies ,especially Ford Motor†¦show more content†¦Taylorism also entailed selecting right people for right jobs and eliminating those who are slackers or unproductive. It was introduced during the era of mechanisation and automation hence laid the ground for automation of industrial processes and also offshoring. Fordism Fordism was established by Henry Ford of the Ford Motor Company. His main aim was to make the industry productive although some scholars would attribute it to development of Taylorism as most of scientific management principles were incorporated in Fordism. Taylor developed the idea of division of labour but Ford perfected it by breaking down the production process into small segments with each segment being handled by single person in an assembly line (Beynon Nichols 2006). Ford also eliminated the use of humans and replaced them with special-purpose machines thus perfecting the automation process started by Taylor. These machines produced standardised mass products for customers for mass consumption. By operating on regulation principle, Ford wanted to ensure workers’ standard of living are raised in proportion to their productivity hence his era was that of high-wages as also emphasised by Taylor. This high wage was to enable these workers to consume the mass products that were being produced. The system also offered job securityShow MoreRelatedDescribe and Critique on Scientific Management1284 Words   |  6 PagesReport Title: Describe and critique the Scientific Management approach pioneered by Frederick Taylor Content Page Executive Summary 2 Who Is Frederick W. Taylor? 3 Scientific Management 4 Fordism 5 Criticisms of Scientific Management 6 Neo - Taylorism 7 Conclusion 8 Reference List 9 Executive Summary This study aims to analyze and discuss both industrial benefits and social implications of Frederick Taylor’s scientific management approach. A brief biography of the â€Å"Father of Efficiency†Read MoreThe Need for An Adequate Evaluation of Organization Behavior 1596 Words   |  7 Pagesorganizational behaviour is needed. This essay is going to analyse the application of a critical model of thinking to studying organizational behaviour. It is going to do so by first setting clear definitions of key terms, describing generally Taylorism, Fordism and Post-Fordism and then proceeding with analysis of different examples. These examples would relate to the above mentioned organizational behaviour theories and the relationships between them. As a result of the analysis a summary is to be drawn focusingRead MoreBusiness Management Improves the Efficiency of an Organization1872 Words   |  7 PagesManagement approaches and practices are core to the concept of business mana gement due to the insight it offers on various aspects of improving the efficiency of organizations. 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Fordism was first recognized by the Italian Communist Antonio Gramsci (1891-1937). He was the writer of Americanism and Fordism. It was about Fordism representing a new form of capitalism which created a new economic structure which affected social life of the laborer on a large scale. Ford came up with a method of manufacturing inexpensive automobiles using the assemblyRead MoreMiss1800 Words   |  8 PagesBehaviour Management Work 1 Key Areas of Focus †¢ Division of Labour †¢ Adam Smith †¢ General Principles of Management †¢ Scientific Management †¢ Frederick Winslow Taylor Organisational Behaviour †¢ Henri Fayol †¢ Bureaucracy †¢ Max Weber 2 Session Objectives †¢ To explore the nature of classical organization theory †¢ To become familiar with the key classical theorists’ work †¢ To understand the principles and impact of: Organisational Behaviour †¢ Bureaucracy †¢ Management †¢

Female Genital Mutilations (FGM) free essay sample

An analysis of the legal and constitutional rights available today against FGM. This paper explores the issue of Female Genital Mutilations (FGM). The author presents the views of Amnesty International and the Feminist Majority Foundation on this issue. In addition, the author will examine the available legal or constitutional rights as a means of merely managing this global situation. Female Genital Mutilations (FGM) for more then a decade now has been the major concern for International organizations. FGM according to these organizations is not only violation against humanity but also human rights, thereby declaring it a constitutional and a legal issue. The Amnesty International, for example, have indicated that FGM is not necessary but only a cultural ritual that people perform from age old, pre-dating Islamic periods. Hence, it does not have any religious significance but a continuation of barbarian rituals. In this regard it is important that one weigh the pros and cons of the issue whether it has any weight from a constitutional or legal stand point of view. We will write a custom essay sample on Female Genital Mutilations (FGM) or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The following discussion investigates this issue in the light of various media and intervention methods that could be utilized by the community.