Stop Pining for Glass-Steagall

摘要

At the depth of the depression in 1933, Congress passed the Glass-Steagall Act to separate commercial banking from the securities business: JPMorgan here, Morgan Stanley there. In 1999 the banks persuaded Congress to tear down the wall. Glass-Steagall was repealed. Banks could merge with brokers.rnNow there's a backlash against that repeal. Some commentators and some politicians blame the repeal for the 2008 financial crisis. They want to resurrect Glass-Steagall.rnThis is a had idea. The repeal of Glass-Steagall was at most a minor factor in leading up to the financial crisis, and its repeal was instrumental in resolving the liquidity squeeze on Wall Street.