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Fri Jun 8, 2018, 07:08 PM

 

Why The Only Answer Is To Break Up The Biggest Wall Street Banks by Robert Reich

https://www.socialeurope.eu/why-the-only-answer-is-to-break-up-the-biggest-wall-street-banks

On Wednesday 30th of May, Federal bank regulators proposed to allow Wall Street more freedom to make riskier bets with federally-insured bank deposits – such as the money in your checking and savings accounts. The proposal waters down the so-called “Volcker Rule” (named after former Fed chair Paul Volcker, who proposed it). The Volcker Rule was part of the Dodd-Frank Act, passed after the near meltdown of Wall Street in 2008 in order to prevent future near meltdowns.

The Volcker Rule was itself a watered-down version of the 1930s Glass-Steagall Act, enacted in response to the Great Crash of 1929. Glass-Steagall forced banks to choose between being commercial banks, taking in regular deposits and lending them out, or being investment banks that traded on their own capital.

Glass-Steagall’s key principle was to keep risky assets away from insured deposits. It worked well for more than half century. Then Wall Street saw opportunities to make lots of money by betting on stocks, bonds, and derivatives (bets on bets) – and in 1999 persuaded Bill Clinton and a Republican congress to repeal it.

Nine years later, Wall Street had to be bailed out, and millions of Americans lost their savings, their jobs, and their homes.

Why didn’t America simply reinstate Glass-Steagall after the last financial crisis? Because too much money was at stake. Wall Street was intent on keeping the door open to making bets with commercial deposits. So instead of Glass-Steagall, we got the Volcker Rule – almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.

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Reply Why The Only Answer Is To Break Up The Biggest Wall Street Banks by Robert Reich (Original post)
Exotica Jun 2018 OP
Phoenix61 Jun 2018 #1
elleng Jun 2018 #3
Crutchez_CuiBono Jun 2018 #2
appalachiablue Jun 2018 #4

Response to Exotica (Original post)

Fri Jun 8, 2018, 07:14 PM

1. I have gotten into more arguments than I

would have thought possible over the Glass-Stegall act. People have no idea what it was, why it was passed, or the shady shit that led to it being repealed.

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Response to Phoenix61 (Reply #1)

Fri Jun 8, 2018, 07:16 PM

3. That's what happens, I'm afraid;

ignorance prevails.

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Response to Exotica (Original post)

Fri Jun 8, 2018, 07:15 PM

2. Add that

To redoing the broken things after this group in the executive branch.

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Response to Exotica (Original post)

Fri Jun 8, 2018, 07:47 PM

4. 'Too Big to Fail,' Infallible!

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