Ginnie Mae The name used by the Government National Mortgage Association, a US government institution designed to support to the housing market. Ginnie Mae was formed in 1968 when its parent organisation, fannie mae (the Federal National Mortgage Association) was split into two. Ginnie Mae remained within the government, while Fannie Mae was hived off to investors. The job of both is to encourage home ownership. Ginnie Mae does so by buying mortgages, bundling them up and reissuing them as securities for investors to buy. This ensures both that there is always a ready buyer in the market for mortgages and that Ginnie Mae has the money to buy them. Ginnie Mae also raises money in the financial markets. Giro A payment system organised by a group of banks, or by postal authorities. It enables institutions to make payments among themselves without perpetually shuffling easycorp https://www.easycorp.com.hk/en/bank-account
cash from one to another. A giro system transfers funds among accounts which the participating institutions hold at the giro’s central clearing house. Glass-Steagall Act A law put forward by Senator Carter Glass and Representative Henry Steagall in 1933, a milestone in US banking legislation. The law prevented any commercial bank in the United States from underwriting and dealing in securities. Securities business was left as the exclusive preserve of investment banks. The strict divide was created in the wake of financial scandals in the late 1920s and early 1930s. Some banks had used depositors’ money to support the price of securities that they were underwriting, sometimes with disastrous consequences for depositors. Many investors who bought the shares of dud dotcom companies during the technology boom of the late 1990s felt similarly short-changed. They discovered that some analysts employed by investment banks had worried more about the fees the bank would receive from a successful initial public offering of the shares than about delivering an objective recommendation of the company’s worth. Changes in the way financial markets operate and pressure from the new breed of financial-services conglomerates finally caused the GlassSteagall Act to fray at the edges, and it was repealed in 1999. Global custody A service for the worldwide settlement and safekeeping of securities. The industry sprang up in 1974 when the employee retirement income security act became law in the United States, forcing US pension funds to separate the management from the custody of the underlying investments. The term “global custody” was coined by Chase Manhattan Bank, which first designed services to satisfy the new law. In those days custodians helped investors to buy, sell and hold securities from a handful of foreign markets; these days it could be as many as 100 markets. With more and more countries encouraging employees to build up their own pensions through diversified holdings of bonds and equities held in unit trusts (mutual funds) and other forms of collective investment, the business of global custody is likely to grow bigger still. Global market A market for goods or services that attracts buyers from all over the world. The idea that there might be a global market for everything from Mars bars to mortgages was first popularised during the 1980s. However, many financial markets were global long before that. Customers of banks in London and New York come from all over the world in search of capital, advice and trade finance. lloyd’s of London has long insured risks (especially those at sea and in the air) throughout the world. Hard commodities (metals of one sort or another) and soft commodities (tea, coffee, wheat and the like) from all over the world have long been bought and sold in London and other international financial centres.