I am now in very good company in saying this, with not only Mervyn King of the BoE calling for it, but Paul Volker and John McCain also saying the same thing as of last week. The Banksters will fight it tooth and nail, because they all kinda like getting the profits and bonuses of hedge funds, rather than the boring old commercial banks they're thought to still be by their depositors, but its the only thing that will prevent these massive banking failures again in future.
Glass-Steagall was instated in the US as a result of the last widespread set of bank failures, the Great Depression. Its function was to prevent commercial banks from speculating with your deposited money. It was repealed just before the end of the last century and the banks took the fullest advantage of their newfound freedom to set themselves up for yet another spectacular failure. A spectacular failure that you and I and everyone else, including our offspring, get to pay for papering over (but note, it is still not "fixed" by this papering over with newly printed money).
No other country's bankers will agree to similar restrictions unless and until the US banks are forced into agreeing to this limitation again, because they naturally want a level playing field like anyone else would. The US necessarily have to take the lead again, just because they are still in the position of dominance over everyone else. Everyone else will then fall into line behind them.
Tuesday, 22 December 2009
As I said before, reinstate Glass-Steagall to avoid the same problems in future
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