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EMMA, as it is called, is overseen by the Municipal Securities Rulemaking Board, the federal regulator of brokerage firms and banks that trade and underwrite debt securities issued by state and local governments.
Without massive federal largesse or the capacity to underwrite debt, deep budget cuts must be implemented.
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The bank has made $61.5 million in fees from underwriting debt for euro zone countries since 2005, according to Thomson Reuters.
And much of that increase came from more than doubling revenue from underwriting debt, a business the firm has expanded rapidly in the last two years.
The Glass-Steagall Act (repealed in 1999) prohibited commercial banks from underwriting debt and equity issues, a very safe activity; it did not prohibit banks from trading, engaging in derivatives, leveraging themselves or making bad loans.
The incentive for credit analysts, who look at company debt rather than shares, to exploit similar conflicts was never as great: the fees from underwriting debt issues do not compare with those from share flotations.Still, it seems that on the debt side temptation was not entirely absent.
It will guarantee all deposits in business accounts, start buying corporate debt through the Federal Reserve and underwrite future debt issues by banks in the hope that the private sector will step up to fund the banking system.
But issuers that raise a lot of money in the debt markets have considerable leverage, given how much they pay Wall Street banks to underwrite their debt.
Moreover, Mr Chávez was, in effect, offering to underwrite his debt issue.
But there is no chance of Merkel agreeing to underwrite the debt of other European countries for the foreseeable future.
They would then put the banks' investment arms into administration, to ensure that no public money was used to underwrite bad debt.
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