Why were U.S. investment banks allowed to operate at higher leverage ratios compared to commercial banks?
Answer to relevant QuestionsHow does the phrase “perception is reality” apply to Bear Stearns?Where does the name hedge fund come from?What are the three key benefits touted by fund of funds? Do you think that fund of funds achieved these benefits during 2008? Why or why not?In the environment immediately following the credit crisis of 2007–2008, what are factors that encouraged and hampered the activities of activists?Explain the importance of hedge funds to investment banks, including revenue, types of business, and which division is most relevant. In addition, with which investment banking areas do hedge funds principally compete?
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