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Glass-Steagall Act The Banking Act of 1933 was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation. It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Carter Glass and Henry B. Steagall.
Some provisions of the Act, such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act. (Wikipedia Jan 2010)
Market regulation
By John Schroy, on June 16th, 2009 | 
The financial reforms of the New Deal lasted for over fifty years and were based on two years of work by the US Senate Pecora Commission, spanning two administrations with bipartisan support.
In contrast, the Obama “reforms” are being concocted in secret to be rushed through the Pelosi-Reid Congress, already famous for passing substantial legislation in the dark of night, without reading the text.
Historically, slap-dash, one-party ‘reforms’ have not survived a Congress controlled by the other party.
The McKinsey Heresy
By John Schroy, on April 6th, 2009 | 
The root problem with big banks today is organizational and product line complexity. Excessive complexity in banks can be traced to the reorganization of Citibank in 1956, under Walter Wriston, following the advice of McKinsey and Company.
Under the McKinsey structure, banks were transformed into industrial-type marketing institutions with matrix organization by product line. Bank managers were paid to meet budgetary targets, rather than for being prudent bankers.
The 'insolvent bank' oxymoron
By John Schroy, on April 1st, 2009 | 
Banks, by their nature, are insolvent, requiring government guarantees of their liabilities to protect against bank runs. Over the last fifty years, the percentage of bank liabilities guaranteed by the government has fallen considerably, while banks, free from the shackles of the Glass-Steagall Act, have become increasingly complex.
Mark-to-market rules do not provide useful information to either bank depositors or investors, but may increase bank capital requirements, reducing the capacity to lend in the midst of a recession.
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