| Lafiel said: the way banks are now it wasn't possible to just drop them (the biggest ones ofcourse) without severly hurting the economy (much more than it has been hurt by bailing them out) |
If congress hadn't repealed the Glass Steagall Act they would not have been to big to prosecute/fail. The act was created to prevent another Great Recession. It prevents Banks and Insurance and Investment houses from being ONE.
While accepting that under Glass–Steagall financial firms could still have “made, sold, and securitized risky mortgages, all the while fueling a massive housing bubble and building a highly leveraged, Ponzi-like pyramid of derivatives on top,” the New Rules Project concludes that commentators who deny the GLBA played a role in the financial crisis “fail to recognize the significance of 1999 as the pivotal policy-making moment leading up to the crash.” The Project argues 1999 was Congress’s opportunity to reject 25 years of “deregulation” and “confront the changing financial system by reaffirming the importance of effective structural safeguards, such as the Glass–Steagall Act's firewall and market share caps to limit the size of banks; bringing shadow banks into the regulatory framework; and developing new rules to control the dangers inherent in derivatives and other engineered financial products.”
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