RSS
Twitter
Facebook
YouTube
theroberthogan wrotegramarye wrote "Bear Stearns and Merrill Lynch would never had to merge with other companies" because they'd have gone bankrupt. They would have needed to sell and been prevented from doing so by Glass-Steagall. They were not commercial banks, they were investment banks. They got bought by commercial banks, meaning we're dealing with only one Lehman instead of three. Glass-Steagall would not have prevented either the issuance of subprime mortgages or their securitization, sale, and stockpiling by investment banks.Your overlooking the major issue, the banking crisis was not caused by the investment banks - they were just the victims of commercial banks who (thanks to Glass-Steagall being repealed) were able to make large volumes of risky subprime loans, then create investment instruments to sell those loans to investment banks across the globe. If commercial banks were prevented from getting that high risk debt off their books by creating investment instruments than they would not have generated so many subprime loans.
I do agree with you that ratings agencies need to be regulated, but I don't think it's fair to discount the affect of the repeal of Glass-Steagall.
In other words, you're perfectly fine when I say more regulation could be good, just not when I say that less could be good. :roll: I suppose you're all for more regulation of hedge funds, too?
Glass-Steagall would not have prevented subprime lending or securitization, so I'm not "discounting" the effect of repealing Glass-Steagall. You're trumping it up. See also here.
Launched in August 2010, TheMetropreneur.com is a local online resource devoted to small business development and entrepreneurship. Its aim is to tell the stories of Central Ohio's business community, foster regional economic development and assist entrepreneurs with its resource-heavy focus.