Primer on Glass-Steagall
Versions of things based on the same facts? That's life, but here is an interesting article it is tough to argue against
http://www.nytimes.com/2015/10/15/u...he-debate.html?contentCollection=weekendreads
Versions of things based on the same facts? That's life, but here is an interesting article it is tough to argue against
So did that cause the financial crisis?
Not exactly! In a popular retelling (see for example this version from Aaron Sorkin’s HBO show “Newsroom”), it was the repeal of Glass-Steagall that unleashed the era of Wall Street risk-taking and the 2008 global financial crisis.
...
There’s no question that aggressive risk-taking by financial firms was a key driver of the crisis. But the arguments that Glass-Steagall’s repeal — that is, the commingling of investment banking and commercial banking within the same firm — was a major cause are tenuous.
...
It is true that two of the biggest bailout recipients were mega-banks with both commercial and investment banking arms, Citigroup and Bank of America. And while JPMorgan Chase and Wells Fargo weathered the crisis relatively well, they also accepted bailouts at the insistence of the Treasury and Federal Reserve in 2008.
...
In other words, refinement of the Volcker Rule is a pathway for advocates of tougher limitations on banks’ risk-taking who do not want to break them up entirely.
Not exactly! In a popular retelling (see for example this version from Aaron Sorkin’s HBO show “Newsroom”), it was the repeal of Glass-Steagall that unleashed the era of Wall Street risk-taking and the 2008 global financial crisis.
...
There’s no question that aggressive risk-taking by financial firms was a key driver of the crisis. But the arguments that Glass-Steagall’s repeal — that is, the commingling of investment banking and commercial banking within the same firm — was a major cause are tenuous.
...
It is true that two of the biggest bailout recipients were mega-banks with both commercial and investment banking arms, Citigroup and Bank of America. And while JPMorgan Chase and Wells Fargo weathered the crisis relatively well, they also accepted bailouts at the insistence of the Treasury and Federal Reserve in 2008.
...
In other words, refinement of the Volcker Rule is a pathway for advocates of tougher limitations on banks’ risk-taking who do not want to break them up entirely.
http://www.nytimes.com/2015/10/15/u...he-debate.html?contentCollection=weekendreads
