Since Dr. Alan Greenspan allowed the Glass–Steagall Act to be revoked US Banks have had problems with their investments and have had to be 'Saved' by TARP. Glass–Steagall Act is also known as part of the Banking Act of 1933 was a law that established the Federal Deposit Insurance Corporation(FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation and prevent another Great Depression.Dr. Alan Greenspan had a long term policy of laissez-faire Free Market and that the Market would control itself. On his retirement he stated that this was an error and he, as FRB Chairman, should have paid more attention to controlling the Free Market Speculation and out right fraud that has brought the world to where it is NOW.I believe that this has proven that the Glass–Steagall Act was beneficial for over 70 years and should be encouraged for the rest of the world.
Volcker Pushes to Rein in BankingPresidential adviser Paul Volcker told members of the Senate Banking Committee the U.S. public did not believe in rescuing speculative banks.February 02, 2010
Volcker Pushes to Rein in BankingPresidential adviser Paul Volcker told members of the Senate Banking Committee the U.S. public did not believe in rescuing speculative banks.February 02, 2010
WASHINGTON, Feb. 2 (UPI) -- Presidential adviser Paul Volcker told members of the Senate Banking Committee the U.S. public did not believe in rescuing speculative banks."There has been, and remains, a strong public interest in providing a safety net ... for commercial banks carrying out essential services. There is not, however, a similar rationale for public funds -- taxpayer funds -- protecting and supporting essentially proprietary and speculative activities," said Volcker, chairman of the president's Economic Recovery Advisory Board.
Activities "unrelated to customer needs" such as managing hedge funds, owning private equity funds or proprietary trading "should stand on their own," he said in a prepared statement.
Investment banks, meanwhile, "assumed the cloak of a banking license" to garner public support when the financial meltdown began to unfold in 2008.
"It is critically important that those institutions, its managers and its creditors do not assume a public rescue will be forthcoming in time of pressure," he added.
However, to ban commercial banks from proprietary lending, Volcker said there should first be international support for taking such a step.
Copyright 2009 by United Press International. All rights reserved.
Activities "unrelated to customer needs" such as managing hedge funds, owning private equity funds or proprietary trading "should stand on their own," he said in a prepared statement.
Investment banks, meanwhile, "assumed the cloak of a banking license" to garner public support when the financial meltdown began to unfold in 2008.
"It is critically important that those institutions, its managers and its creditors do not assume a public rescue will be forthcoming in time of pressure," he added.
However, to ban commercial banks from proprietary lending, Volcker said there should first be international support for taking such a step.
Copyright 2009 by United Press International. All rights reserved.
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