bobbyw24
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- Sep 10, 2007
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It was probably inevitable that the Glass-Steagall Act would be revisited in response to the banking crisis, and Senators John McCain and Maria Cantwell have now brought the proposition forward, whereby commercial banking and investment banking wouldn’t be allowed under the same financial roof, something many politicians believe will help protect a financial crisis like we’re in from happening again.
At a news conference in Washington, former presidential candidate and Arizona Senator John McCain said, “Under our proposal, too-big-to-fail banks would be forced to return to the business of conventional banking, leaving the task of risk taking or management to others.”
Response to the legislation, which has been already introduced in the House, was immediate and strong on both sides of the fence.
Former general counsel at the FDIC, John Douglas, strongly opposed the measure saying, “Trying to split them up is crazy … The integration of the securities and banking function came about because of the need of large corporate customers to have integrated banking and securities services.”
Others, like the Obama Administration and Christopher Dodd, head of the banking committee were less than enthusiastic about the proposal, but remained somewhat neutral in their responses, with the Obama administration saying the bill passed last week in the house addresses many of the concerns surrounding the banking industry, and Dodd saying while it was interesting, he wasn’t going to add it to any legislation at this time.
President of the Community Bankers of America, Camden Fine, was strongly behind the idea of reinstating of Glass-Steagall, saying it wasn’t an accident that less than ten years after repealing Glass-Steagall that we’re facing the economic and banking crisis we are.
If the act were to be reinstated, almost all large financial institutions would be broken up to some degree, as they’ve blended together with commercial and investment banking makes them all susceptible to decreasing in size to meet the criteria demanded by Glass-Steagall.
When you consider that the vast majority of profits being generated in the banking industry at this time are in the investment banking sector, you do have to wonder after all the regulations to cut back on overdraft fees and credit-related services, how the banks would make money if Glass-Steagall was to be reinstated. Talk about egg on the face of everybody.
This is probably why it won’t happen, as it would expose the foolishness of interfering in the market by the government in reference to banking fees, and expose that the government indeed does want commercial and investment banking to work under the same roof so there are real opportunities to turn a profit after taking away a large piece of revenue from the banking industry through the actions of the government.
http://www.americanbankingnews.com/2009/12/17/reinstating-glass-steagall-act-receives-mixed-responses/
At a news conference in Washington, former presidential candidate and Arizona Senator John McCain said, “Under our proposal, too-big-to-fail banks would be forced to return to the business of conventional banking, leaving the task of risk taking or management to others.”
Response to the legislation, which has been already introduced in the House, was immediate and strong on both sides of the fence.
Former general counsel at the FDIC, John Douglas, strongly opposed the measure saying, “Trying to split them up is crazy … The integration of the securities and banking function came about because of the need of large corporate customers to have integrated banking and securities services.”
Others, like the Obama Administration and Christopher Dodd, head of the banking committee were less than enthusiastic about the proposal, but remained somewhat neutral in their responses, with the Obama administration saying the bill passed last week in the house addresses many of the concerns surrounding the banking industry, and Dodd saying while it was interesting, he wasn’t going to add it to any legislation at this time.
President of the Community Bankers of America, Camden Fine, was strongly behind the idea of reinstating of Glass-Steagall, saying it wasn’t an accident that less than ten years after repealing Glass-Steagall that we’re facing the economic and banking crisis we are.
If the act were to be reinstated, almost all large financial institutions would be broken up to some degree, as they’ve blended together with commercial and investment banking makes them all susceptible to decreasing in size to meet the criteria demanded by Glass-Steagall.
When you consider that the vast majority of profits being generated in the banking industry at this time are in the investment banking sector, you do have to wonder after all the regulations to cut back on overdraft fees and credit-related services, how the banks would make money if Glass-Steagall was to be reinstated. Talk about egg on the face of everybody.
This is probably why it won’t happen, as it would expose the foolishness of interfering in the market by the government in reference to banking fees, and expose that the government indeed does want commercial and investment banking to work under the same roof so there are real opportunities to turn a profit after taking away a large piece of revenue from the banking industry through the actions of the government.
http://www.americanbankingnews.com/2009/12/17/reinstating-glass-steagall-act-receives-mixed-responses/
