Forum Post: This is urgent..
Posted 13 years ago on Nov. 23, 2011, 11:54 a.m. EST by JohnLennon
(2)
This content is user submitted and not an official statement
OWS should start asking, night and day, for the reenactment of the Glass-Steagall Act. This demand shouldn’t wait. It is an urgent demand, which concerns not only the U.S.A. but also the European Union and the whole world. The 1% are powerful and they are using their enormous power to continue as if nothing has happened. But, how long can they stand against a clear and justified demand of 99%?
POWER TO THE PEOPLE! http://www.youtube.com/watch?v=cvTCpApk6Ak&feature=related
Greetings from Europe.
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Considering Glass-Steagall originally setup the FDIC do you wonder why the FDIC is still in place if the GS was repealed? I think what you really want to say is repeal Gramm-Leach-Bliley Act.
That appears correct. In fact, any modification of the Glass-Steagall which removed regulation (degregulation) should be considered. This lanuage should be considered in the99PercentDeclaration.org, too.
From Wikipedia - "Some provisions of the Act, such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act, named after its co-sponsors Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia).[2][3]
The repeal of provisions of the Glass–Steagall Act by the Gramm–Leach–Bliley Act in 1999 effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. This repeal may have contributed to the severity of the financial crisis of 2007–2011 by allowing banks to become so large, complex, and intertwined that both they and their regulators failed to see the systemic risk that a failure in one part of one bank could lead to cascading failures across the global financial system"
Well, I think that a bit more is needed than just to ask to repeal Gramm-Leach-Bliley Act. In fact, all set of regulations, and appropriate mechanisms of control, need to be (re)introduced. I’ll try to be clear. I’ll simplify things. We need banks, and we need financial markets. The issue is how to make them function properly. Now, a new serious problem concerning banks is emerging: people are slowly starting to lose confidence in banks (at least in Europe). This is why, in this globalized world, it is urgent to separate deposit banks (commercial banks) from investment banks, and thus insure people that their money is safe. If not, people will completely lose confidence in banks, and will start to massively take their money out of the banks. Bankers should think about this seriously. Taxpayers’ money couldn’t save them anymore, because there wouldn’t be money for that (budget deficits, debt crisis). ‘To big to fail’ can also mean ‘to big to save’. The point I want to make is that it is urgent to: 1) foster (or restore) the confidence in banks and 2) limit speculations. The best way, to achieve this two goals, to my opinion, is to reenact Glass-Steagall Act (or to repeal its modifications), because people widely have positive opinion about this Act (in Europe also), so their confidence in banks should be regained. Furthermore, Glass-Steagall Act limits speculation and in addition it leaves open the possibility to gradually put financial system in order. This putting system in order is badly needed, as it can be seen from the FCIC Report http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_full.pdf
Another interesting document (much shorter than the previous) is also available on-line: William D Jackson, Glass-Steagall Act: Commercial vs. Investment Banking, Congressional Research Service, 1987. http://digital.library.unt.edu/ark:/67531/metacrs9065/
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