Robert ReichThe Glass-Steagall Act was the law of the land until 1999.
It prohibited banks from using their deposits to pursue high-risk investments — separating Wall St. from Main St.
I say bring it back!
GJ Groothedde 🇪🇺@rbreich Who tossed it out? (sorry, I'm from Yurp and do not know all the ins and outs)
HGaskinsLook up the Gramm–Leach–Bliley Act of 1999.
moondad
respectmyplanet.org@rbreich Agree 100%. Separating savings from investment was the firewall that allowed America to prosper since 1933. It took an utter collapse of the US economy for senators to have the guts to write the bill. The banks fought it since its passage. It was Texas senator Phil Gramm that sponsored its repeal & later became an executive at mega bank UBS in Switzerland. Since the day Bill Clinton signed Gramm Leach Bliley into law in 1999, America has been in steady decline. Keep it up Robert!
Christopher Noyes@rbreich there was a reason for it
Stu Duerson, machina exo deus@rbreich
That's an admirable stance in and of itself.
But the SVB, if I understand it correctly, was investing in interest instruments that would otherwise be considered safe, but didn't have sufficient reserves to withstand a run. The fault here is in the reserve requirement, and the power of people like Peter Thiel to instigate a bank panic by their individual advice, that overruns the reserve. It was a mid-air crash of banking regulations.
That's an admirable stance in and of itself.
But the SVB, if I understand it correctly, was investing in interest instruments that would otherwise be considered safe, but didn't have sufficient reserves to withstand a run. The fault here is in the reserve requirement, and the power of people like Peter Thiel to instigate a bank panic by their individual advice, that overruns the reserve. It was a mid-air crash of banking regulations.
@rbreich
It's just one more argument for there being a cap on wealth/power.
No more billionaires, until we eradicate the crushing poverty of our most needy.
It's just one more argument for there being a cap on wealth/power.
No more billionaires, until we eradicate the crushing poverty of our most needy.
Casey Jennings@rbreich I think the issue was not "high risk" investments. I think it was more of an issue of having a bunch of depositors acting as a herd because they were all in "tech" and all backed by the VC industry.
The risk the bank took was doing a lousy job of managing it's interest rate risk (the investments were all government bonds and agencies). So yes - dumb bank, poorly managed and it needed much better regulatory oversight that the Republicans and Trump kneecapped in 2018.
Stargeezer Smith@rbreich seems that for over 20 years the bank execs have had the privilege of writing their own rules.
HistoPol (#HP) 🏴 🇺🇸 🏴Interesting point.
Alas, completely lost on the commentator, it seems. ;)