Gramm-Leach-Bliley, Ten Years On
November 12, 2009 3:30 PM Subscribe
Ten years ago today the government reversed one of the key elements of the Depression-era banking laws, knocking down the firewall between commercial banks, which take deposits and make loans, and investment banks, which underwrite securities. The repeal of the Glass-Steagall Act of 1933 was seen at the time as a way to help American banks grow larger and better compete on the world stage.
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But not everybody
at the time saw it as a good thing: Senator Byron Dorgan, Democrat of North Dakota, was one of eight senators who stood up to oppose
the repeal of Glass-Steagall in 1999, and today many are wondering
if re-instating Glass-Steagall or something like it
might go a long way towards preventing future financial meltdowns.
What does Dorgan himself advocate today?
"Three things," the senator [says, see "who stood up to oppose" link above]... "One is to separate investment banks and FDIC-insured banks. Second, prohibit FDIC-insured banks from dealing in risky financial instruments on their own proprietary accounts... And third, abolish 'too big to fail.' If you're too big to fail, you're too big. Too big to fail is what I call no-fault capitalism."