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Taming the megabanks : why we we need a new Glass-Steagall Act by Wilmarth Jr, Arthur E. is a book available to read on EtoBox.

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Banks were allowed to enter securities markets and become universal banks during two periods in the past century - the 1920s and the late 1990s. Both times, universal banks made high-risk loans and packaged them into securities that were sold as safe investments to poorly-informed investors. Both times, universal banks promoted unsustainable booms that led to destructive busts - the Great Depression of the early 1930s and the Global Financial Crisis of 2007-09. Both times, governments were forced to arrange costly bailouts of universal banks.Congress passed the Glass-Steagall Act of 1933 in response to the Great Depression. The Act broke up universal banks and established a decentralized financial system composed of three separate and independent sectors: banking, securities, and insurance. That system was stable and successful for over four decades until the big-bank lobby persuaded regulators to open loopholes in Glass-Steagall during the 1980s and convinced Congress to repeal it in 1999.Congress did not adopt a new Glass-Steagall Act after the Global Financial Crisis. Instead, Congress passed the Dodd-Frank Act. Dodd-Frank's highly technical reforms tried to make banks safer but

Author

Wilmarth Jr, Arthur E.

Publisher

Oxford University Press, Incorporated

Published

2020

Language

EN

ISBN

9780190260736

Subjects

Finance, Business