The Glass-Steagall Act was a reaction to the collapse of a large portion of the American commercial banking system in early 1933. It allowed for theseparation of bank types according to their business, namely commercial and investment banking .The reform came in the Great Depression, when thousands of banks collapsed. Glass-Steagall was repealedin 1999 under the Gramm-Leach-Bliley Act, permitting a wave of consolidation in the financial industry.
The current debate about restoring the GSA opposed two main ideas.
Some individuals supportthe Cantwell-McCain bill would want to reestate a 21eme Glass-Steagall act to restore public confidance in banking practices. And others who think that it is not the good solution.
Large amounts offederal dollars have been spent to stabilize the economy during the crisis, including the TARP money approved by the Congress and the economic stimulus package enacted by President Obama. The currentdeficit of the united states is huge. The reality of most Americans is that they are still losing jobs as well as the benefits attached to employment, such as retirement benefits, health care benefitsand homes, even with the preservation of over half-a-million jobs attributed by the White House to the stimulus. A part of the population think that it is crucial to restore prudent, sound rules toour financial system. In fact, to restore the Glass-Steagall Act is might be a way of "soothing public anger over bailouts and bonuses ». They believe that it will be better and less dangerous forinstance for some firms such as Goldman, Morgan Stanley, Citigroup, JPMorgan Chase and Wells Fargo have to spin off investment and insurance operations. They want to turn back the clock with the prposal ofrestoring th GSA to bar depository institutions from proprietary trading or funding private-equity firms or hedge funds and avoid others future crisis.
which allowed banks to merge with...