Home > DocuBase > Article

« All DocuBase Articles

 

Wednesday, 17th February 2010

No Going Back: Why We Cannot Restore Glass-Steagall’s Segregation of Banking and Finance

No Going Back: Why We Cannot Restore Glass-Steagall’s Segregation of Banking and Finance
Source: Levy Economics Institute of Bard College

The purpose of the 1933 Banking Act—aka Glass-Steagall—was to prevent the exposure of commercial banks to the risks of investment banking and to ensure stability of the financial system. A proposed solution to the current financial crisis is to return to the basic tenets of this New Deal legislation.

Senior Scholar Jan Kregel provides an in-depth account of the Act, including the premises leading up to its adoption, its influence on the design of the financial system, and the subsequent collapse of the Act’s restrictions on securities trading (deregulation). He concludes that a return to the Act’s simple structure and strict segregation between (regulated) commercial and (unregulated) investment banking is unwarranted in light of ongoing questions about the commercial banks’ ability to compete with other financial institutions. Moreover, fundamental reform—the conflicting relationship between state and national charters and regulation—was bypassed by the Act.

+ Full Paper (PDF; 215 KB)


Category:

Source:




Please note: DocuTicker's editors collect citations for full-text PDF reports freely available on the web but we do not archive these reports. When you click a link to find and/or download the report, you are leaving the DocuTicker site. DocuTicker makes no representations regarding the ongoing availability of any report or any external resource. Links were accurate as of the date of posting.

« All DocuBase Articles







 

 
 
 

Article Categories

All Article Categories »

Sources

All DocuBase Sources »

Source Categories

All Source Categories »

Archive

All Archives »