2,093
edits
Changes
Jump to navigation
Jump to search
===External articles===* [http://consumerist.com/2008/04/blame-the-subprime-meltdown-on-the-repeal-of-glass-steagall.html Blame The Subprime Meltdown On The Repeal Of Glass-Steagall], Consumerist, April 17, 2008.
SW: added content, refs, external articles and resources
Between 1929 and 1933, more than 4,000 U.S. banks had closed permanently, saddling depositors with close to $400 million in losses. In 1930, the Bank of the United States failed, reportedly because of activities of its security affiliates that created artificial conditions in the market. In March 1933, all of the banks throughout the country were closed for a four-day period by President Roosevelt, and 4,000 banks closed permanently.<ref name="DEMOS">James Lardner, [http://www.demos.org/publication.cfm?currentpublicationID=DEF8F451-3FF4-6C82-552CC1037CA0FA10 A Brief History of the Glass-Steagall Act]: A Background Paper, DEMOS, November 10, 2009</ref>
One of the causes of the problems was banks using depositor's funds in sideline businesses such as underwriting. William Donaldson, a former chairman of the Securities and Exchange Commission, said in an interview: “If they were underwriting a stock offering and had trouble getting rid of the stuff, they would buy it with people’s deposits.”<ref>Louis Uchitelle, [http://economix.blogs.nytimes.com/2010/01/22/glass-steagall-vs-the-volcker-rule/ Glass-Steagall vs. the Volcker Rule], Economix, New York Times, January 22, 2010</ref>
According to DEMOS: A Brief History of the Glass-Steagall Act<ref name="DEMOS" />, the [[Pecora Commission]], a congressional investigation led by prosecutor Ferdinand Pecora unearthed massive evidence of recklessness, cronyism, and fraud both in the use of depositor funds and in the promotion of securities for sale to the public. A top executive of Chase National Bank (ancestor of today’s [[JPMorgan Chase]]) had enriched himself by short-selling his company’s shares during the stock market crash. National City Bank (now [[Citibank]]) had taken failed loans to Latin American governments, packaged them as securities, and unloaded them on unsuspecting investors. Banking and securities underwriting made for a poisonous combination, many people concluded.
*[[Gramm-Leach-Bliley Act]]
*[[Pecora Commission]]
*[[Volcker Rule]]
===References===
* [http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html The Wall Street Fix: Mr. Weill Goes to Washington: The Long Demise of Glass-Steagall], Frontline, May 8, 2003.
* James Lardner, [http://www.demos.org/publication.cfm?currentpublicationID=DEF8F451-3FF4-6C82-552CC1037CA0FA10 A Brief History of the Glass-Steagall Act]: A Background Paper, DEMOS, November 10, 2009
* [http://www.newdeal20.org/2009/05/04/glass-steagall-act-962/ Glass-Steagall Act], New Deal 2.0
===External articles===
* Sam Stein, [http://www.huffingtonpost.com/2009/05/11/glass-steagall-act-the-se_n_201557.html Glass-Steagall Act: The Senators And Economists Who Got It Right], Huffington Post, May 11, 2009.
* James LardnerLouis Uchitelle, [http://wwweconomix.demosblogs.orgnytimes.com/2010/01/publication.cfm?currentpublicationID=DEF8F45122/glass-3FF4steagall-6C82vs-552CC1037CA0FA10 A Brief History of the -volcker-rule/ Glass-Steagall Actvs. the Volcker Rule]: A Background Paper, DEMOSEconomix, New York Times, November 10January 22, 20092010.
===Related SourceWatch articles===
