Forum Post: "What went wrong? Why did the world economic crisis occur . . . ? . . . abolishment of the Glass-Steagall Act "
Posted 3 years ago on March 21, 2012, 10:48 a.m. EST by nomdeguerre
from Brooklyn, NY
This content is user submitted and not an official statement
"The complete abolishment of the Glass-Steagall Act in February 1999 was the main structural cause of the financial bubble in the United States and Europe from 2002 to 2007. It was abolished under the leadership of Treasury Secretary Lawrence Summers during the process of liberalizing financial markets in the late 20th century. The act was enacted in 1933 in order to divide the business of banking and securities in light of the tragic experiences of the Great Depression. Surplus liquidity created by an extended period of lax monetary policy in the first decade of the 21st century under the auspices of the Federal Reserve and Chairman Greenspan fueled a so-called money game by investment banks, which was inconsistent with the laws of real demand. Such policy and administration by the Fed and Treasury were the main causes of the bubble. " http://www.canon-igs.org/en/column/network/20120305_1283.html
It's very simple, unleashed Wall St. bankers crashed the world economy. First step: reinstate Glass-Steagall.