Investment banks went public in the 1980s, allowing them to acquire huge sums of money from their shareholders. In the late 1990s, financial sectors merged into huge corporations. Mergers could cause economic collapse. In 1998, Citicorp and Travelers merged to form Citigroup. Stock market analyzes gave high marks to companies that predicted bankruptcy. This led to an affair involving 10 investment banks: Bear Stearns, Credit Suisse, Deutsche Bank, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, Goldman Sachs and Citigroup. Derivatives were created in the 1990s. Markets became increasingly unstable, even though banks claimed otherwise. In 2001, a securitization food chain was created. Lenders sold CDOs to investment banks, which led investors to buy CDOs from investment banks. This method was popular among retirement funds because most CDOs received a AAA rating. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get Original EssayBorrowers Received Subprime Loans; the probability of repaying them was low, due to high interest rates. In 10 years, subprime loan financing increased from $30 billion to $600 billion per year. AIG has started selling Credit Default Swaps. If Credit Default Swaps failed, AIG would be bankrupt. Goldman Sachs bet against CDOs, while encouraging its clients to buy CDOs. After Fannie Mae and Freddie Mac came under government control, Lehman Brothers' shares collapsed. In September 2008, Bank of America acquired Merrill Lynch. AIG, however, owed $13 billion to the holders of Credit Default Swaps; had no money to pay them. The bubble burst and chaos erupted. Banks began to take over each other, such as Bank of America acquiring Countywide. Yet after this crisis, lobbyists fought harder than ever to prevent reforms, which are still happening today. Ronald Reagan began the government's 30-year period of deregulation, appointing Donald Regan, who at the time was CEO of Merrill Lynch, as Treasury Secretary. In 1982, the Reagan administration deregulated savings and loans, allowing them to make risky investments with depositors' money. In the late 1980s, many savings and loans went bankrupt, leaving people without wealth. Reagan appointed Alan Greenspan to head the Federal Reserve, even after Greenspan accepted a bribe from Keating to approve his "strong business plans." Bill Clinton and George W. Bush also reappointed Greenspan. Deregulation continued under the Clinton administration. The Clinton administration helped companies, like Citigroup, grow without violating the Glass-Steagall Act. In 1999, Congress passed the Gramm-Leach-Bliley Act, overturning the Glass-Steagall Act. The Securities and Exchange Commission allowed investors to lose $5 trillion due to lack of preparation. The CFTC proposed a bill to regulate derivatives, but the Clinton administration rejected the regulations. Due to Greenspan's ideology, he refused to use the Property and Equity Protection Act. Greenspan, Ben Bernanke, Summers, and Tim Geithner all received Raghuram G. Rajan's article, Has Financial Development Made the World Riskier?, with a.