Did Glass-Steagall Act of 1933 generate U.S. bank more stable? Was the overall effect positive? Literature?
Answers:
The answer to you press requires an inference to some extent than man base on reality but surrounded by my view the answer it "yes" it did trade name for an overall positive bank industry. It insulated the industry from the risks of the securities business. Unfortunately, because of lobbying pressure, much of the Glass-Steagall Act have since be repealed within favor of broadening the financial powers of the bank industry and in the same way the risks that a system bailout will be needed sometime contained by the adjectives. A prime example be the deregulation of the S&L industry during the Regan years. Cost the taxpayers billions and billions.
Legislation passed by Congress authorizing deposit insurance and prohibiting commercial bank from owning full-service brokerage firms. Under Glass-Steagall, these bank be prohibited from investment bank deeds, such as underwrite corporate securities or municipal revenue bonds. The regulation be designed to insulate dune depositors from the risk involved when a wall deal within securities and to prevent a mound collapse close to the one that occur during the Great Depression. The artistic separation of commercial and investment bank have already significantly eroded when, on November 12, 1999 the Financial Services Modernization Act of 1999 be signed into imperative, repealing parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act and effectively allowing bank, brokers, and insurers into respectively other's businesses. Basically, the 1999 Act allows bank to affiliate near securities firms and insurers through a holding company structure and permit locally chartered bank to rivet surrounded by most financial happenings through direct subsidiaries. While provisions of Glass-Steagall verbs to restrict bank from most underwrite goings-on and securities firms from taking deposits, these restrictions apply merely to the bank and securities firms, not to their Financial Holding Company affiliates and are, thus, controlled.
It be cut of the New Deal... SEC be also passed. The psychological effect be it's greatest impact..(i.e., if it have be passed clandestinely, w/ no fanfare, little effect).
All bank are predators, however, and they should adjectives be taken over by Government. We requirement Hugo Chavez as President!