Economics Glossary

Derivatives

In finance, a derivative is a financial instrument that has a value, based on the expected future price movements of the asset to which it is linked—called the underlying asset such as a share or a currency. There are many kinds of derivatives, with the most common being swaps, futures, and options. Derivatives are a form of alternative investment which can be thought as a way of insuring against the fall of the underlying asset. If Derivatives are used as an instrument in themselves they can be a risky form of investment.

Glass Steagall

The Banking Act of 1933 was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation.The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks. Many claim this repeal directly contributed to the severity of the Financial crisis of 2007–2010.

Secondary Banking Crisis 1973

The Secondary Banking Crisis of 1973–75 was a dramatic crash in property prices in Great Britain which caused dozens of small ("secondary") lending banks to be threatened with bankruptcy. The Bank of England bailed out around thirty of these smaller banks, and intervened to assist some thirty others