Useful Secrets for Investments in 2009

By Contributor • Feb 12th, 2009 • Category: Make Money

Talking about the period beginning in 2008, it should be pointed out that there has been probably no area in the law that has seen more activity than in the arena of banking and investment law. The point is that unless you have been living in a cave in some remote location you have at least some understanding of how volatile the banking and investment industries have become in recent months. It is really true and most experts agree that there has not been a more challenging time in the areas of investments and banking since the Great Depression years ago.

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The alteration in the rules and regulations that have kept certain financial institutions from becoming involved in consumer banking has been one of the more significant changes concerning banking and investment law. It is also very important to mention that lately, some of financial institutions that previously were not permitted to become involved in consumer banking have been permitted to do so. The argument has been that these institutions will become more financially viable if they were allowed to engage in providing banking services directly to consumers.

You should also be aware of the other banking and investment regulation change that directly affects consumer’s centers on the amount of money deposited by a consumer in certain financial institutions that will be provided with FDIC protection. So, as it is known, a consumer could have on deposit in a bank up to $100,000 that would be fully insured by the FDIC. It simply means that in the case that the bank ended up going under a consumer was insured for up to $100,000 deposited at such a bank. The FDIC, because of the current problems, has temporarily increased the amount of money it will insure on behalf of consumers who deposit money with certain financial institutions. So, the amount of money on deposit at a particular institution that the FDIC fully will insure on the part of a consumer has risen to $250,000 until the end of December 2009.

But, what is important, a consumer can now have on deposit at a single bank up to a quarter of a million dollars that will be fully insured by the FDIC until the end of 2009.

As concerning banking and investment law, there has been a real tightening in the way in which financial institutions can package and sell home mortgage loans to other institutions and investors. A lot of experts claim that one of the reasons why there are such significant financial problems today arises from the fact that institutions and individuals ended up investing in packages of higher risk loans. These packaged loans known as derivatives and that is why there have been some major changes in the way home mortgage loans can be “packaged and resold” from this point on into the future. You should also know that there could be additional changes in the laws governing the status of these derivatives or “packages” of mortgage loans and the purchasing and selling of these “securities” into the future as well.

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