Click the image to watch me talk about Andrew Ross Sorkin’s piece on Glass-Steagall and where he gets it wrong.
Posts Tagged ‘Glass-Steagall’
Notes From Underground: AUGUST 30 ,2002 … A Revisit To The SOAPBOX
May 14, 2012LETTERS TO THE EDITOR – Profit centres too big to fail.
By YRA HARRIS.
30 August 2002
Financial Times
(c) 2002 The Financial Times Limited. All rights reserved
Sir, John Plender (“How banks got in a mix”, August 21) correctly identifies the systemic dangers that accompanied the passage of the Graham-Leach-Bliley act. The repeal of Glass-Steagall has pushed the US banking system to the brink of “moral hazard”. The conglomeration of all financial services under one roof has entangled banks in numerous ethical conflicts. Additionally, Graham-Leach-Bliley has made several institutions so large that the Fed cannot allow them to fail.
A single institution’s deep involvement in every facet of financial dealings does not create greater synergy but greater risk. These large, private profit centres know they are too big to collapse. This realisation adds great uncertainty to the entire financial landscape. Rewarding private profits while socialising the risk is a pathway to disaster. Glass-Steagall should never have been repealed without a bank forfeiting its right to Federal Deposit Insurance Corp insurance.
Notes From Underground: Hazy Global Outlook
May 21, 2010
Click on the image to watch Yra talk financial reform and sovereign debt markets on CNBC’s “Squawk on the Street.”
