Glass-Steagall Fans Plan New Assault If Volcker Rule Deemed Weak

[xchrom]

http://www.bloomberg.com/news/2013-12-09/glass-steagall-fans-plan-new-assault-if-volcker-rule-deemed-weak.html


Former Federal Reserve chairman Paul Volcker said in testimony to Congress in 2010,..

Five U.S. agencies will finish the Volcker rule tomorrow after more than three years of Wall Street resistance to its limits on trading and investing. Lawmakers and their allies who want to rein in big banks are ready to pounce if it isn’t strict enough.

Politicians and advocates -- some Democrats, some Republicans -- who blame the 2008 financial crisis on deregulation express concern that the Volcker rule won’t adequately block banks from making risky bets with their own money. If they deem the rule too weak, they say it will add fuel to a push to reinstate a Depression-era law known as Glass-Steagall that until 1999 split banks and securities firms.

Such vows suggest U.S. lenders planning to challenge the ban in court risk a political backlash. A 2011 draft of the rule, required by the Dodd-Frank Act at the urging of former Federal Reserve chairman Paul Volcker, disappointed some politicians and organizations who wanted a stronger ban. Lawmakers already have drafted legislation.

“If people aren’t satisfied with the implementation of this thing, that’ll redouble the pressure to go back and look for something else,” Marcus Stanley, policy director for Americans for Financial Reform, an umbrella group of more than 250 organizations pushing for stronger restrictions on Wall Street. “The Volcker rule was the major thing that said that these guys just crashed the world economy and we’re going to ban something.”

[Egalitarian Thug]

1. Even Glass-Steagall didn't really go far enough, but it was a good start. If what comes out

is anything but another fig-leaf hiding a DC blowjob for Wall Street, I'll be pleasantly shocked.

[el_bryanto]

2. Glass Steagall worked pretty well till they took it down

I mean obviously there are going to be abuses - that's the problem with a capitalist economy - everybody trying to figure out ways around the system (just as corruption is the inevitable result of a command economy). But the economic landscape created by Glass Steagall seems far more sustainable than anything we've had sense.

Bryant

[Egalitarian Thug]

4. But keep in mind that it was under the "odious restrictions" of Glass-Steagall that

the parasitic financial industry was able to, once again, collapse the economy and reap another windfall by stealing from working people.

Glass-Steagall was good, but it didn't address the fundamental issue of the extra-governmental, "federal" banking system.

[1StrongBlackMan]

8. How do you figure? ...

But keep in mind that it was under the "odious restrictions" of Glass-Steagall that the parasitic financial industry was able to, once again, collapse the economy and reap another windfall by stealing from working people.

While I agree the federal reserve is an extra-governmental problem, I was under the believe that banking was pretty much in check until Clinton did the bankers' bidding by repealing GS.

[Egalitarian Thug]

12. First, let me restate that I'm not saying Glass-Steagall was bad at all.

But it did allow for the split between the federal reserve banks and the so-called retail banks, this at the very least doubled the price of currency for those that make the economy. It also allowed the Federal Reserve to offer discounts on commercial paper and government bonds to and among those banks which, while it is one way of addressing short term fluctuations in the supply of currency, also leaves the door open to the kind of back-room shenanigans that exploit, to the detriment of the rest of us, the special license society grants to banks.

[truedelphi]

9. Not saying I disagree, I don't, but would like you to expand your

Thoughts on this.

[Egalitarian Thug]

14. See #12. n/t

[arcane1]

26. Indeed. And there's a big difference between passing a law and enforcing it. n/t

[Egalitarian Thug]

33. Another aspect most people never consider until it effects them. Just having a

law doesn't mean it will be enforced fairly or at all.

[leftyohiolib]

3. bill clinton's legacy repealling glas steagall and deregulation of the media

now i can get rush on every fucking radio station. thanks bill

[rhett o rick]

5. Dont forget NAFTA. nm

[leftyohiolib]

7. oh that's correct- fuckin nafta and welfare reform that was clinton wasnt it?

so our democratic pressident gave us deregulated banks deregulated media deregulated work force what do we need republicans for ?

[truedelphi]

10. My guess is we

"need" Republicans to state that women don't have any right to reproductive health or choice.

Then the "Democrats" in leadership roles at the Party can consider themselves to be so very much better, even while many of us are giving up utilities and ability to stay warm for food, or vice versa.

[rhett o rick]

17. HEY!! You were looking behind the curtain again. nm

[truedelphi]

19. I am forced to look behind the curtains,

And under the couch cushions, as well, that is where the change for lunch often hides.

[rhett o rick]

20. What's "change"? That word's been abused and I no longer know what it means. nm

[Left Coast2020]

25. That was what apparently came out of the "Carville War Room"

Play the middle and be more "electable".

[Egalitarian Thug]

15. Ending welfare, dropping health care, the list goes on.

There's a reason he achieved his highest approval number about 6 weeks before he left office.

[rhett o rick]

6. It's essential that savings banks be separated from investment banks. nm

[1StrongBlackMan]

11. We agree ...

"Saving bank" = Where "we" put our $

Pre-GS "Investment banks" = where they put their money

Post-GS Banking (period) = where they invest their $ to get access to our $, without risking their's.

[Dawson Leery]

22. +1

[Recursion]

29. Eh. I think that's backwards.

Retail banks can always gamble with your money; that's what they do, and it's why we have an FDIC. What Glass-Steagall's repeal meant was that retail banks could run proprietary desks, and gamble with their own money. And, again, it wasn't the newly-hybridized retail banks that failed, it was the pure investment banks. In fact, it was only because there was no Glass-Steagall that the retail banks could step in and stop the bleeding of the IB houses.

[Recursion]

28. Why?

Why is that essential?

The banks that failed were the pure investment banks, not the hybrids that the repeal of Glass-Steagall allowed.

[bvar22]

13. I'm in favor...but this is only a 1/2 measure.

Something MUST be done about "Too-Big-to-Fail".
Those words are an insult to a democracy.
If nothing is done about "Too-Big-to-Fail" beyond shoveling our money at them every time they whine, then NOTHING will change.

Because of inaction on the part of our representatives and leadership,
"Too-Big-to-Fail" has become the Holy Grail of Corporatism.
We need Leadership and a Party that 'Welcomes their Hatred'
and doesn't welcome them to the White House.


We need another Teddy Roosevelt (Trust Buster),
to break these greedy pigs up,
and then a Franklin Roosevelt to steer the Democratic Party back in the right direction.


[font color=firebrick size=3][center]"If we don't fight hard enough for the things we stand for,
at some point we have to recognize that we don't really stand for them."
--- Paul Wellstone[/font][/center]
[center][/font]
[font size=1]photo by bvar22
Shortly before Sen Wellstone was killed[/center][/font]

[font size=5 color=firebrick]Solidarity![/font]

[rhett o rick]

16. We must drive that home. We can not exist as a democracy if we have banks that are too big to fail.

nm

[woo me with science]

18. Thank you. nt

[Jackpine Radical]

21. "Too big to fail" is actually OK

as long as we're discussing nationalized banks here.

No humongous industry with the power to wreck civilization ought to be private. Not the energy companies (producers of gas & electricity both), not the railroads, etc. In each case, these behemoths operate in their own self-interest, which generally lies far from the public interest.

[Wilms]

23. ^

[Recursion]

27. I still think Glass-Steagall doesn't address an existing problem

The banks that failed weren't the banks that were covered by Glass-Steagall to begin with -- the retail banks were the ones who were able to step in and prevent more of a meltdown by buying the investment banks. For that matter, none of the Big 5 investment banks per se exist anymore except Goldman Sachs.

I'm not against returning to the rule. I don't see any harm it would do. But I also don't see what actual problem it addresses.

[moondust]

30. Is David Stockman nuts?

He wants an "industrial strength" Glass-Steagall.

Here's his explanation on The Ed Show Monday (6:22):

http://www.msnbc.com/the-ed-show/watch/gearing-up-for-a-second-shutdown-85796931577

[Recursion]

31. Is Barney Frank?

He opposed reinstating it.

[on point]

32. I'm for putting every last word back into law. No amendments

[ctsnowman]

34. They should overhaul

wallstreet as well. No more betting against a company. If you want to invest then invest but this insider bullshit has got to be stopped.