Home > Uncategorized > Regulatory Rumpus: The Battle Over Reinstating Glass-Steagall

Regulatory Rumpus: The Battle Over Reinstating Glass-Steagall

Everybody should know about Glass-Steagall, regardless of which side they stand on.

Business & Money

Among the small number of Americans who are passionate about financial regulation, no topic raises hackles more than the so-called Glass-Steagall act. It is “so-called” because when you hear the term “Glass-Steagall” the speaker is most certainly referring to four provisions from the Banking Act of 1933, which was sponsored by Senators Carter Glass and Henry Steagall. The four provisions in the law popularly referred to as “Glass-Steagall” banned deposit-taking institutions from dealing in securities for their own profit, and it banned firms primarily focused on securities-dealing from taking deposits.

Ever since the financial crisis, there has been a debate over whether the repeal of these provisions through the 1999 Gramm-Leach-Bliley Act contributed to the financial crisis. And this five-year-old debate was rekindled last week when Senators Elizabeth Warren, John McCain, and Angus King introduced a “21st-century Glass-Steagall Act,” which would actually be more strict than it’s 80-year-old predecessor…

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