Since the Glass-Steagall Act, a group of regulations enacted in 1933, were eliminated in 1999 by Congress and President Bill Clinton, US banks have gotten much bigger.
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But Clinton, in a nod to Wall Street’s myriad of businesses from hedge funds to private equity firms to trading shops, said that regulating the financial services industry was now way more complicated than that one rule. With intense lobbying and financial modernization, Glass-Steagall was soon considered obsolete, and legislation was signed to repeal the Act.
The law prevented banks like JPMorgan and Bank of America from dealing with both Main Street and Wall Street.
This is a much more significant measure that would raise more revenue and more effectively tame not only the abuses of high-frequency trading but other forms of churning and short-termism dear to Wall Street’s greedy heart. “I went to Wall Street and said, ‘Cut it out'”. The Banking Act of 1933 (also know as Glass-Steagall) was formed to lift the economy after the crippling 1929 stock market crash and Great Depression.
But it was repealed in 1999 by President Bill Clinton, husband of current Democratic frontrunner for president, Hillary Clinton.
“But we also have to worry about a few of the other players – AIG, a big insurance company; Lehman Brothers, an investment bank”.
That is the kind of performance that tells liberals that she is working on the problem, and the financial services industry that she is trying to understand it. If Wall Street has one gripe about left-leaning politicians, it’s that lack of trying. Wolf says he’s supporting former Secretary of State Hillary Clinton this cycle, but he also took a high-profile meeting recently with Joe Biden.
Clinton wants to give regulators authority to break up banks “too large or too risky to be managed effectively” – but this is authority they already have under Dodd-Frank and are unlikely to use because it’s a lot to ask of unelected regulators.
“We need to separate the casino, speculative, mega-bank gambling that we have to insure with our money, from the commercial banking – namely, reinstating Glass-Steagall”, O’Malley said.
While there is no explicit indication what Clinton wants to do in regard to investment advice, there is a footnote that suggests she supports the DOL’s proposal to impose the fiduciary standard on retirement accounts, InvestmentNews writes. But she thinks Glass-Steagall is too outdated and blunt of an instrument.
“My plan is more comprehensive”.
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“If only you look at the big banks, you may be missing the forest for the trees”, she later added. Principally, the plan seeks to limit risk-taking by the banks and increase accountability for financial crimes.
