The 21st Century Glass-Steagall Act
will rebuild the wall between commercial and investment banking and make our financial system more stable and secure.
Elizabeth Warren's proposed 2014 financial legislation, is that the 1999 "repeal" of the 1933 Glass-Steagall Act
removed the restrictions that kept investment banks from using commercial bank deposits to speculate in an unregulated marketplace.
In 1927 the McFadden Act prohibited banks from doing business anywhere but in their original state, and in 1933 Congress adopted the Glass-Steagall Act
, (3) which both set up the deposit insurance system (FDIC) and separated commercial banking from investment banking (IB).
Rather, conglomeration bred conflicts of interest in Weill's firms, and others - the very conflicts that the original Glass-Steagall Act
was designed to prevent.
Hence, White concludes, the reimposition of Glass-Steagall Act
rules separating investment banking from commercial banking would "not even be a case of locking the barn door after the horses have run out.
Also during his first term in 1933, Roosevelt signed the Glass-Steagall Act
, which created the Federal Deposit Insurance Corp.
In addition to seeking the impeachment of Obama "for gross violations of the Constitution in the service of Wall Street imperialism," Rogers is calling for significant investment in manned space exploration to avoid "mass extinction of the human species" and for the reinstatement of the Glass-Steagall Act
of 1933, which prohibited commercial banks from conducting investment business.
However, the watering down and ultimate repeal of the Glass-Steagall Act
undeniably led to the repeat of banking institution's speculation with deposits and opened the floodgates for more erroneous legislation akin to pre-Depression era practices.
In the third broadcast, Moyers talks with former Citigroup Chairman John Reed , now chairman of the board of MIT, and former Senator Byron Dorgan , to explore how the mid-90's merger of Citicorp and Travelers Group brought down a crucial firewall between banks and investment firms -- the Glass-Steagall Act
, which had protected consumers from financial calamity since the aftermath of the Great Depression.
At the heart of the political check was America's Glass-Steagall Act
The banks that sold subprime mortgages and ALT-A loans with as many options to make loan payments as they could muster along with financial firms, shopped for a president to deregulate the Glass-Steagall Act
, which was also known as the Banking Act of 1933.
The Federal Reserve System, created in 1913, and the Federal Deposit Insurance Corporation, established by the Glass-Steagall Act
of 1933, contributed to stability, but left intact the fundamental structural weakness inherent in an underregulated, fragmented banking system.