You hear lots of talk
about breaking up the banks and going back to the time when the
Glass-Steagall Act of 1933 still existed. The one that supposedly
separated commercial banking from investment banking. The idea is to
have banks less susceptible to speculation and risk.
Well, parts of the Dodd-Frank Act of 2010 were supposed to get at some easing of speculation, and to-date, none of the U.S. regulators have yet come up with a practical solution.
The truth is, Glass-Steagall itself was rife with contradictions; it allowed commercial banks to underwrite municipal bonds and perform other risk-laden activities. Glass-Steagall had problems which many prefer to forget ever existed. (See the Earl J. Weinreb NewsHole® comments.)
Well, parts of the Dodd-Frank Act of 2010 were supposed to get at some easing of speculation, and to-date, none of the U.S. regulators have yet come up with a practical solution.
The truth is, Glass-Steagall itself was rife with contradictions; it allowed commercial banks to underwrite municipal bonds and perform other risk-laden activities. Glass-Steagall had problems which many prefer to forget ever existed. (See the Earl J. Weinreb NewsHole® comments.)
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