Yes, Glass-Steagall should be reinstated but to do so would require an informed, patriotic Congress and a Supreme Court that rejects Citizens United. Woe is us.
as i mentioned yesterday in your wonderfully educational piece, i absolutely agree with you. glass-steagall must be re-enstated to protect private citizens from thieving bankers.
We need to do more than bring back Dodd-Frank. Yes, that’s the open wound in the banking industry that needs closing.
But we Dems in Congress should take this moment to go after the knife that caused the chaos, and that’s the wiping out of Glass-Steagall. Without it’s separation of commercial and investment banking, professor Reich’s whack-a-mole scenario will never be resolved.
Let’s put pressure on the Senate to pass a bill to reinforce that separation and force Republicans in the House to vote against economic sanity and stability.
Deregulation brings disaster - derailed trains, failing banks. Why do we elect politicians whose sole interest is enriching themselves at the expense of others?
Just one problem, corporate rule! Only HJR48, the We the People Amendment, can and will save us. It will shift the power balance back to We the People, and We will once again REGULATE the banks, (and save our planet)! But our Constitution will not amend itself. We need your help at movetoamend.org.
These days I think that nothing short of a French Revolution stands a chance of saving the common man. Greed is universal and deeply entrenched across the congressional aisles.
I agree wholeheartedly!!!!! I continue to learn so much from you &, so often, find myself thinking “ Well, of course, that’s just common sense.” But greed tramples common sense - even when we should/ could have learned from the past. Banking regulations - what a concept!
Repeal of Glass-Steagall was the most inane of a series of inane acts by Bill Clinton. There followed a quantum leap in Wall Street/corporate wealth and power, an activist SCOTUS, the rejection of Gore, the installation of an avid tax-cutting president, the abominable Citizens United, Lehman Brothers, increased corporate influence in DC via massively increased lobbying, the rape of the medical profession, and now this...SVB crap. It just never goes away.
Adam Smith himself was the first to recognize that capitalism needs to be HEAVILY regulated, and taxes on the wealthy need to be VERY high. This is not difficult.
Clinton made a huge political mistake, the correction for which needs to be political. Obviously this will not come from Trump or Meathead. It seems we need the DNC to be radical for the first time in a century. Sanders is the most popular politician amongst Democrats, and carries 12% of the electorate who would vote for Sanders, but votes Republican if Sanders is not nominated. That's a huge 24% swing, and it's how the Dems lost the Midwest in 2016.
IF BIDEN DOESN'T RUN IN 2024, THE DNC SHOULD GROW A PAIR AND, FINALLY, NOMINATE SANDERS AS PRESIDENTIAL CANDIDATE. I THINK HE WOULD ACCEPT. THEN TRUMP AND MEATHEAD ARE TOAST.
President Biden said he would ask Congress and banking regulators “to strengthen the rules for banks to make it less likely this kind of bank failure would happen again, and to protect American jobs and small businesses.” Observers of Silicon Valley Bank’s failure note that the 2018 loosening of banking regulations that had been imposed after the 2008 crash paved the way for SVB’s troubles. One of the lobbyists for this loosening was Greg Becker, who until Friday was the person in charge of SVB.
Meanwhile, David McIntosh, president of the right-wing Club for Growth, retorted, “Changing the rules after the crash to prop-up liberal investors at the expense of taxpayers is pure crony capitalism,” a sentence that seems to mix a bunch of different concepts together. Florida governor Ron DeSantis and Trump-adjacent figures took a different tack, falling back on the culture-war lens they use for everything, blaming the failure not on the company’s poor business decisions but on “wokeness.”
In an opinion piece in the Wall Street Journal, Andy Kessler, who writes on technology and markets, echoed the culture warriors, writing that “in its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.”
In other news, House Republicans have ended the congressional investigation into former president Trump’s financial records. Representative Jamie Raskin (D-MD), the top Democrat on the Oversight and Accountability Committee, on Sunday accused committee chair James Comer (R-KY) of coordinating with Trump’s lawyers to end the probe into Trump’s finances. On January 19, 2023, Trump’s lawyer Patrick Strawbridge wrote to the lawyer for Trump’s accounting firm, whose records the committee had subpoenaed in 2019, saying “my understanding is that the Committee has no interest in forcing Mazars to complete it and is willing to release it from further obligations under the settlement agreement.”
Instead of pursuing the investigation into Trump, Comer says he plans to look into “money the Bidens received from China.” Trump accused Biden of taking a $1.5 billion payoff from China without any evidence. Now Comer claims to have “documents to prove” that the Biden family has taken illicit money from China, but there is no evidence that this allegation is true. Raskin revealed Sunday that Comer has quietly subpoenaed 14 years of business records from Bank of America for three of Hunter Biden’s business associates.
How exactly would Glass-Steagall have prevented SVB from imploding? Bank investments in Treasury securities was an allowed activity under Glass-Steagall. Let’s not blame lack of basic risk management structures on Glass-Steagall. Who buys a long-term treasury investment portfolio using anything but core deposits, without actively managing interest rate and maturity risk. And why wasn’t at least part of that portfolio “held for sale” and marked to market which would have forced management to face up to it earlier than they did? This was good old-fashioned stupidity in asset-liability management that would have been flagged by the bank examiners in the 80’s or earlier. The difference is that bank management paid more attention to exam findings back then. Now, anyone but the Fed examiners are pretty toothless, at least the Fed has some enforcement tools which the bigger banks need to pay attention to.
In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have “1 Black,” “1 LGBTQ+” and “2 Veterans.” I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.
This is, of course, nonsense. As my colleague Michael Mechanic explained in a newsletter last week, American conservatives (and some Democrats) have been loath to accept any whiff of progressivism in our financial institutions. That's why the Senate blocked a Labor Department rule that would have allowed retirement fund managers to let clients invest in ESG funds—those that consider environmental and social factors. And it's also why they choose to focus not on Silicon Valley greed or lax government regulations, but on the bank's stated support of LGBTQ causes.
Do you think Bear Stearns was "distracted by diversity demands"? Lehman Brothers? Bailey Building and Loan from It's a Wonderful Life? Give me a break.
Regulators are not asleep at the wheel. Regulators' managers are captive. These are captive agencies. I worked in three captive agencies in my career - two federal, one state. It is so easy for the regulatees to capture the regulators.
Yes to Glass-Steagall in the US, but assuming JB can progress this, I'm thinking it would be helpful if this is a subject that can be addressed in financial summits led by JB across the developed world, reason being that no one country, not even one of the size and financial strength of the US, can isolate itself from international bank failure. And there's a lot of pretty weak bank regulation still out there, with continuing emphasis from some quarters to reduce what there is. For example, in the UK, where the Government is now seeking to roll back the ring fence legislation (Dodd-Frank equivalent) put in place after the banking crises alongside the UK Treasury also looking to reduce bank stress test levels.
My own view is that this is a subject that needs very serious consideration and action across the developed world, without which I feel at some point the whole pack of cards could collapse.
Yes, Glass-Steagall should be reinstated but to do so would require an informed, patriotic Congress and a Supreme Court that rejects Citizens United. Woe is us.
Yes, bring back Glass-Steagall! As Elizabeth Warren said, make banking boring again.
as i mentioned yesterday in your wonderfully educational piece, i absolutely agree with you. glass-steagall must be re-enstated to protect private citizens from thieving bankers.
We need to do more than bring back Dodd-Frank. Yes, that’s the open wound in the banking industry that needs closing.
But we Dems in Congress should take this moment to go after the knife that caused the chaos, and that’s the wiping out of Glass-Steagall. Without it’s separation of commercial and investment banking, professor Reich’s whack-a-mole scenario will never be resolved.
Let’s put pressure on the Senate to pass a bill to reinforce that separation and force Republicans in the House to vote against economic sanity and stability.
Deregulation brings disaster - derailed trains, failing banks. Why do we elect politicians whose sole interest is enriching themselves at the expense of others?
Just one problem, corporate rule! Only HJR48, the We the People Amendment, can and will save us. It will shift the power balance back to We the People, and We will once again REGULATE the banks, (and save our planet)! But our Constitution will not amend itself. We need your help at movetoamend.org.
These days I think that nothing short of a French Revolution stands a chance of saving the common man. Greed is universal and deeply entrenched across the congressional aisles.
I agree wholeheartedly!!!!! I continue to learn so much from you &, so often, find myself thinking “ Well, of course, that’s just common sense.” But greed tramples common sense - even when we should/ could have learned from the past. Banking regulations - what a concept!
Repeal of Glass-Steagall was the most inane of a series of inane acts by Bill Clinton. There followed a quantum leap in Wall Street/corporate wealth and power, an activist SCOTUS, the rejection of Gore, the installation of an avid tax-cutting president, the abominable Citizens United, Lehman Brothers, increased corporate influence in DC via massively increased lobbying, the rape of the medical profession, and now this...SVB crap. It just never goes away.
Adam Smith himself was the first to recognize that capitalism needs to be HEAVILY regulated, and taxes on the wealthy need to be VERY high. This is not difficult.
Clinton made a huge political mistake, the correction for which needs to be political. Obviously this will not come from Trump or Meathead. It seems we need the DNC to be radical for the first time in a century. Sanders is the most popular politician amongst Democrats, and carries 12% of the electorate who would vote for Sanders, but votes Republican if Sanders is not nominated. That's a huge 24% swing, and it's how the Dems lost the Midwest in 2016.
IF BIDEN DOESN'T RUN IN 2024, THE DNC SHOULD GROW A PAIR AND, FINALLY, NOMINATE SANDERS AS PRESIDENTIAL CANDIDATE. I THINK HE WOULD ACCEPT. THEN TRUMP AND MEATHEAD ARE TOAST.
As Trump would say "Whattya gotta lose?"
Right you are, Robert. Bring back Glass-Steagall.
From Heather Cox Richardson
President Biden said he would ask Congress and banking regulators “to strengthen the rules for banks to make it less likely this kind of bank failure would happen again, and to protect American jobs and small businesses.” Observers of Silicon Valley Bank’s failure note that the 2018 loosening of banking regulations that had been imposed after the 2008 crash paved the way for SVB’s troubles. One of the lobbyists for this loosening was Greg Becker, who until Friday was the person in charge of SVB.
Meanwhile, David McIntosh, president of the right-wing Club for Growth, retorted, “Changing the rules after the crash to prop-up liberal investors at the expense of taxpayers is pure crony capitalism,” a sentence that seems to mix a bunch of different concepts together. Florida governor Ron DeSantis and Trump-adjacent figures took a different tack, falling back on the culture-war lens they use for everything, blaming the failure not on the company’s poor business decisions but on “wokeness.”
In an opinion piece in the Wall Street Journal, Andy Kessler, who writes on technology and markets, echoed the culture warriors, writing that “in its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.”
In other news, House Republicans have ended the congressional investigation into former president Trump’s financial records. Representative Jamie Raskin (D-MD), the top Democrat on the Oversight and Accountability Committee, on Sunday accused committee chair James Comer (R-KY) of coordinating with Trump’s lawyers to end the probe into Trump’s finances. On January 19, 2023, Trump’s lawyer Patrick Strawbridge wrote to the lawyer for Trump’s accounting firm, whose records the committee had subpoenaed in 2019, saying “my understanding is that the Committee has no interest in forcing Mazars to complete it and is willing to release it from further obligations under the settlement agreement.”
Instead of pursuing the investigation into Trump, Comer says he plans to look into “money the Bidens received from China.” Trump accused Biden of taking a $1.5 billion payoff from China without any evidence. Now Comer claims to have “documents to prove” that the Biden family has taken illicit money from China, but there is no evidence that this allegation is true. Raskin revealed Sunday that Comer has quietly subpoenaed 14 years of business records from Bank of America for three of Hunter Biden’s business associates.
How exactly would Glass-Steagall have prevented SVB from imploding? Bank investments in Treasury securities was an allowed activity under Glass-Steagall. Let’s not blame lack of basic risk management structures on Glass-Steagall. Who buys a long-term treasury investment portfolio using anything but core deposits, without actively managing interest rate and maturity risk. And why wasn’t at least part of that portfolio “held for sale” and marked to market which would have forced management to face up to it earlier than they did? This was good old-fashioned stupidity in asset-liability management that would have been flagged by the bank examiners in the 80’s or earlier. The difference is that bank management paid more attention to exam findings back then. Now, anyone but the Fed examiners are pretty toothless, at least the Fed has some enforcement tools which the bigger banks need to pay attention to.
Diversity is the reason! Say what?
In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have “1 Black,” “1 LGBTQ+” and “2 Veterans.” I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.
This is, of course, nonsense. As my colleague Michael Mechanic explained in a newsletter last week, American conservatives (and some Democrats) have been loath to accept any whiff of progressivism in our financial institutions. That's why the Senate blocked a Labor Department rule that would have allowed retirement fund managers to let clients invest in ESG funds—those that consider environmental and social factors. And it's also why they choose to focus not on Silicon Valley greed or lax government regulations, but on the bank's stated support of LGBTQ causes.
Do you think Bear Stearns was "distracted by diversity demands"? Lehman Brothers? Bailey Building and Loan from It's a Wonderful Life? Give me a break.
—Abigail Weinberg
Glass-Steagall should be reinstated, for it is said that banks that live in Glass-Steagall should never throw deposits.
Regulators are not asleep at the wheel. Regulators' managers are captive. These are captive agencies. I worked in three captive agencies in my career - two federal, one state. It is so easy for the regulatees to capture the regulators.
Yes to Glass-Steagall in the US, but assuming JB can progress this, I'm thinking it would be helpful if this is a subject that can be addressed in financial summits led by JB across the developed world, reason being that no one country, not even one of the size and financial strength of the US, can isolate itself from international bank failure. And there's a lot of pretty weak bank regulation still out there, with continuing emphasis from some quarters to reduce what there is. For example, in the UK, where the Government is now seeking to roll back the ring fence legislation (Dodd-Frank equivalent) put in place after the banking crises alongside the UK Treasury also looking to reduce bank stress test levels.
My own view is that this is a subject that needs very serious consideration and action across the developed world, without which I feel at some point the whole pack of cards could collapse.