Glass-Steagall

ℹ️Glass-Steagall
File:Glass steagall.png
By :	Aristotle Sabouni
Created :	2017-05-15

1Liner  :  Glass-Steagall was the 1930's new deal regulation that separated Commercial and Investment banks. That is all.

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Summary  :  Glass-Steagall was the 1930's new deal regulation that said Commercial and Investment banks had to be separated. There would be no "universal" banks (that did both). In theory, by separating sides there would be more transparency, and people might behave less risky. In truth, there's just more inefficiency and the same risk.

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If you have any better explanations that you’ve read, let me know and I’ll look into them and debunk them as appropriate. But all of them have been variants of that hole-riddled self-contradictory theme.

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🔗 External Links

• http://www.sjsu.edu/faculty/watkins/subprime.htm
• http://www.occ.gov/news-issuances/federal-register/94fr9214.pdf - Smoking Gun: the Clinton CRA policy (1994) creating an Interagency Task Force on Fair Lending, that demanded lower standards to prevent red-lining (rejecting high credit risks) and would crack down on any banks that didn’t comply.