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Politics : President Barack Obama
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To: RetiredNow who wrote (113693)5/17/2012 12:06:37 PM
From: mel221  Read Replies (2) of 149317
 
>> I think we should bring back Glass-Steagal.

MM, your thoughts please.

As I recall, G-S was repealed because the US needed bigger banking institutions in order to compete globally. 30 years ago, we had lots of little banks that operated within a state's boundaries. Basically, most states had 2 or 3 banks doing local deals.

Then some restrictions were lifted and interstate bank ownership allowed banks to build national brands. The banks became bigger and fewer in number. This takes us to the mid 1990s. At this point, the biggest of the US banks were to still too small to compete with the monster banks in Japan and elsewhere. The big non-banking companies around the world couldn't work with the "puny" US banks.

So, G-S was repealed in an effort allow the US banks to participate in the global banking markets. Clearly, the policy of TBTF has frustrating implications. But rolling back the regulations where the US banks are too small to globally compete is problematic as well.

From your perspective, What are the negatives of the preventing US banks from competing for global business?

My suspicion is that evolution is always moving forward. Big banks are necessary and we will have to find new solutions to the new problems.
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