TAKE ACTION NOW - CALL YOUR CONGRESSMAN, CALL YOUR SENATOR, SUPPORT the Return to Prudent Banking Act of 2013. Learn more here.
The term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.
The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.
Five provisions of the Banking Act pertained to this separation:
Beyond a doubt there are more than 10 reasons to reinstitute Glass-Steagall, the infamous legislation from the 1930's put into place to regulate banks after the horrific abuses of the 1920's and beyond. But simplicity sake, here are the 10 best reasons I can think. Send your own to twistedpolitix at gmail when you have a moment.
@SenWarren asks #Lew: How big do the biggest banks have to get before we consider breaking them up? http://t.co/W3EM5Gn6YS #GlassSteagall
— Glass-Steagall (@howtodoit1) August 27, 2013
The term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.
The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.
Five provisions of the Banking Act pertained to this separation:
- Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
- Section 5(c): Glass-Steagall would also apply to state-chartered banks.
- Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
- Section 21: If a bank did trade securities, it could not take deposits.
- Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System)
Beyond a doubt there are more than 10 reasons to reinstitute Glass-Steagall, the infamous legislation from the 1930's put into place to regulate banks after the horrific abuses of the 1920's and beyond. But simplicity sake, here are the 10 best reasons I can think. Send your own to twistedpolitix at gmail when you have a moment.
- Prevent systemic failures similar to those that occurred during the 2008 crisis by splitting the power and concentration of wealth into many hands
- Split up the too big to fail and too big to jail banks
- Prevent the bankruptcy of the FDIC since the next financial crisis will most certainly mean the loss of depositors money
- Decentralize the wealth, assets liabilities and risk of the Big 5 banks that control 80% of all the assets in the United States
- Breath life into local economies around the country by opening up new opportunities for local investment and local banking
- Bring to light the deceptive practices of the Federal Reserve system and their charter members
- End the deceptive practices of the big investment banks that have created over $700 trillion in derivatives and sold them to unsuspecting investors
- Decentralize the creation and destruction of the money supply since it is fractional reserve banking that allows banks to lend money into existence.
- Bring the hundreds of trillions of dollars in derivatives out of the dark and onto exchanges and back to reality.
- Eliminate the inherent conflict of interest from the massive banks that circumvent all stte and national laws while corrupting politicians, judges, and government bureaucrats with an infinite supply of money.
TAKE ACTION NOW - CALL YOUR CONGRESSMAN, CALL YOUR SENATOR, SUPPORT the Return to Prudent Banking Act of 2013. Learn more here.
No amount of training, compliance or regulation will solve basic conflicts between banking & dealing. You need to separate. #GlassSteagall
— Jim Rickards (@JamesGRickards) July 4, 2012
#GlassSteagall is “absolutely necessary” said @FDICgov board member Thomas Hoenig. http://t.co/buoGXRJn via @BW
— BoldProgressives.org (@BoldProgressive) July 3, 2012
Joseph Stiglitz of the Roosevelt Institute, a Nobel Prize winner, contended:
Commercial banks are not supposed to be high-risk ventures; they are supposed to manage other people’s money very conservatively…Investment banks, on the other hand, have traditionally managed rich people’s money — people who can take bigger risks in order to get bigger returns. When repeal of Glass-Steagall brought investment and commercial banks together, the investment-bank culture came out on top. There was a demand for the kind of high returns that could be obtained only through high leverage and big risk-taking.Senators Maria Cantwell (D-WA) and John McCain (R-AZ) advocated the return of Glass-Steagall as well:
So much U.S. taxpayer-backed money is going into speculation in dark markets that it has diverted lending capital from our community banks and small businesses.em) were barred from holding advisory positions in companies whose primary purpose was trading securities.Remember too big to fail and too big to jail means that the Big 5 banks in this country are ABOVE the LAW! TAKE ACTION NOW - CALL YOUR CONGRESSMAN, CALL YOUR SENATOR, SUPPORT the Return to Prudent Banking Act of 2013. Learn more here.
This is not a left or a right issue. This is COMMON SENSE!
Spend a little time to understand the issue and the it should be clear.
TAKE ACTION NOW - CALL YOUR CONGRESSMAN, CALL YOUR SENATOR, SUPPORT the Return to Prudent Banking Act of 2013. Learn more here.
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