Friday, March 06, 2009
Volcker: Bring Back Glass-Steagall
Commercial banks should be separated from investment banks in order to avoid another crisis like the U.S. is now experiencing, according to former Federal Reserve Chairman Paul Volcker.In other words, the system we had in place since the Great Depression, the system that was undone during the Clinton administration - should be restored. And it should.
“Maybe we ought to have a kind of two-tier financial system,” Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, said today at a conference at New York University’s Stern School of Business.
Commercial banks would provide customers with depositary services and access to credit and would be highly regulated, while securities firms would have the freedom to take on more risk and practice trading, “relatively free of regulation,” said Volcker.
Why would that work ? Why wouldn't the investors simply take the next turn ?
But I doubt it will happen. I further doubt if that bill got to obama's desk, he would veto it. Obama likes and looks forward to where our country is headed.
I am afraid we are collectively 'going over the cliff.' Life will be getting pretty scary as time passes.
Boys and girls, the games are over, way, way over.
Why don´t tell the truth? The real reason behind this crisis is the repeal of the Glass Steagall Act. Bring it back and we will have the beginning of a real solution instead of flooding the economy with billions of dollars that will lead to the worst inflation since the 1920s in Germany. A more creative approach to finance this massive bailout is needed. Why should the taxpayer have to pay for Wall Street sins? Lets also expose the culprits: Citigroup stockholders, the Clinton Administration, and the crony capitalism of bankers and legislators of both parties. We really do not have an opposition party in America.
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