In response to unregulated financial malfeasance and the Crash of ’29, The Banking Reform Act of 1933 imposed rules to ensure banks were banks, not investment houses or gambling casinos. When the legislation was introduced, the American Bankers Association protested, saying the bill was “unsound, unscientific, unjust, and dangerous.”
Our current crisis is due in no small part to the weakening of these provisions in the 1980s and the repeal of Glass-Steagall in 1999. When you hear banks and their political cronies screaming about regulations today, just remember, we’ve heard it all before. They were wrong in ’33 and they’re wrong now.
From Bloomberg
