25-05-2013, 10:29 PM
David Guyatt Wrote:A classic case of revolving doors, I suppose.
Politicians can't be left alone to draft laws about banking, as they'd cock it up and ruin everything. :ballchain:
Yeah, David, like the Glass-Steagall Act of 1933, also known as the Bankng Act of 1933.
"The GlassSteagall Act is a term often applied to the entire Banking Act of 1933, after its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama.[1] The term GlassSteagall Act, however, is most often used to refer to four provisions of the Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms.[2] This article deals with that limited meaning of the GlassSteagall Act. A separate article describes the entire Banking Act of 1933.
(The undoing of the Glass-Steagall Act: - AE)
Starting in the early 1960s federal banking regulators interpreted provisions of the GlassSteagall Act to permit commercial banks and especially commercial bank affiliates to engage in an expanding list and volume of securities activities.[3] By the time the affiliation restrictions in the GlassSteagall Act were repealed through the GrammLeachBliley Act of 1999 (GLBA), many commentators argued GlassSteagall was already "dead."[4] Most notably, Citibank's 1998 affiliation with Salomon Smith Barney, one of the largest US securities firms, was permitted under the Federal Reserve Board's then existing interpretation of the GlassSteagall Act.[5] President Bill Clinton publicly declared "the GlassSteagall law is no longer appropriate."[6] Many commentators have stated that the GLBA's repeal of the affiliation restrictions of the GlassSteagall Act was an important cause of the late-2000s financial crisis.[7][8][9] Some critics of that repeal argue it permitted Wall Street investment banking firms to gamble with their depositors' money that was held in affiliated commercial banks.[10] Others have argued that the activities linked to the financial crisis were not prohibited (or, in most cases, even regulated) by the GlassSteagall Act.[11] Commentators, including former President Clinton in 2008 and the American Bankers Association in January 2010, have also argued that the ability of commercial banking firms to acquire securities firms (and of securities firms to convert into bank holding companies) helped mitigate the financial crisis.[12]" (From Wikipedia - AE)
Adele