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September 21, 2008
Did Gramm-Leach-Bliley Help Cause Today's Financial Turmoil?
Don Boudreaux
Over at Marginal Revolution, Tyler Cowen argues -- persuasively, in my view -- that the repeal of the Glass-Steagall Act played no negative role in creating America's current financial turmoil.
Posted by Don Boudreaux in Current Affairs, Financial Markets, Regulation | Permalink
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Comments
Didn't read Tyler's post, but the dissolution of the GS Act didn't suddenly permit deposit institutions to gamble in the stock market and trade OTC derivatives with deposits. Investing and banking operations were still kept separate. There was nothing in the GS Act that prevented banks from engaging in loose credit standards, though. In other words, there was nothing in the GS Act that stopped banks from gambling in the housing market instead of the stock market.
Posted by: Methinks | Sep 21, 2008 8:27:21 PM
BOB BRINKER SAYS THAT THE GS ACT WAS ONE OF THE CAUSES OF THE RECENT FINANCIAL MELT DOWN.
Posted by: YEDDY68 | Sep 27, 2008 6:03:12 PM
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