From the 2008 Financial Services Fact Book:
The landscape of the financial services industry shifted radically in 2008, as turbulence in the financial markets led to the failure of a number of industry stalwarts and the end of Wall Street as we know it. Among the year's developments:
- 158-year-old Lehman Brothers collapsed, marking the largest bankruptcy in U.S. history. Four other major investment banks moved into the traditional banking industry through acquisition or a change in structure: Merrill Lynch was taken over by Bank of America; Bear Stearns was acquired by JP Morgan Chase; and Morgan Stanley and Goldman Sachs converted to traditional bank holding companies.
- More than a dozen banks went into bankruptcy or receivership, including Washington Mutual, the largest failure ever of a U.S. bank.
- The Federal Reserve Bank acquired nearly an 80 percent stake in the giant insurance and financial services firm American International Group in exchange for an $85 billion loan.
- Congress passed the landmark Emergency Economic Stabilization Act, which allocated $700 billion to rescue the ailing economy.
Also in 2008 the U.S. Treasury proposed a sweeping overhaul on regulation of the U.S. financial services industry. The proposal includes a consolidation of bank regulation, stronger oversight of mortgage lending, an optional federal charter (OFC) for insurance companies and an increase in the Federal Reserve's authority to investigate the financial industry. If enacted, the Treasury plan would mark the most significant changes to financial services regulation since the Gramm-Leach-Bliley Financial Services Modernization Act, which was passed in 1999 to remove many of the Depression-era barriers that restricted competition between the various financial services sectors, allowing consumers a wider range of options.
