Dylan Rattigan Explains Gramm Leach Bliley On It's 10th Birthday

interesting (4.00 / 1)

thanks for the reminder of the cause of the subprime mortgage crisis

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by: admin @ Sat Nov 14, 2009 at 21:49:01 PM CST

After Mercilessly Pounding Middle America, Banks May Be Forced by Fed to Divest (4.00 / 1)

In 1933, following the collapse of this nation's banking system, the Glass-Steagall Act was created to establish the FDIC and protect consumers from much of the conflict of interest, speculation, and risk associated if commercial banks were to become intertwined with securities.

From 1933 to 1999, consumers were protected from the risks associated with blending banking and securities.  Then, after intense lobbying and pressure, not to mention plenty of campaign contributions from the banking industry, lawmakers ripped down the walls between banking and securities, so they could operate seamlessly.

The Gramm-Leach-Bliley Act passed through a Republican Congress and Senate and was signed by Democrat President Bill Clinton.  Thus, the repeal of Glass-Steagall was really a bipartisan stroke job on Middle America.

A day late and a dollar short, today Federal Reserve Chairman Bernanke said regulators should have the power to shrink banks that pose risks to markets, signaling support for proposals in Congress that let the U.S. reduce the size of financial companies.

With all that banks have done to consumers, e.g. $700 billion bailout, extending mortgages to unqualified borrowers, 30% credit card interest rates, $35 overdraft fees, ATM fees, etc., this is a step in the right direction.

For goodness sakes, even China maintains a separation between banking and securities.  Completely separating banking and securities activities would better protect Middle America, but let's not be greedy; the nose of the camel under the tent is better than nothing.

A. Muser
http://americanmuser.wordpress...

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by: AmericanMuser @ Tue Nov 17, 2009 at 00:33:57 AM CST

thanks for your comments and joining us (0.00 / 0)

looking forward to more of your insightful thoughts

Providing in-depth analysis of elections

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by: admin @ Tue Nov 17, 2009 at 07:55:17 AM CST

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