ABSTRACT
When we left the American financial system at the end of chapter 5, we had
got as far as the 1970s. The legacy of the NewDeal era reforms was still strong:
• Fannie and Freddie were playing an important rôle in the residential
mortgage market;
• There was a split between old-style banks on the one hand (regu-
lated by the FED and not active in securities trading) and the bro-
ker/dealers on the other (regulated by the SEC, and not active in
lending or deposit taking).
