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What we really need to do is to re-institute The Glass Steagal Act. In 1999 like Obamacare, an Act that was pushed through in the middle of the night. Gramm Leech Bliley Act which was bipartisan gutting of the Glass Steagal Act. Allowed for the merging of Banks, Financial Institutions, Insurance Companies and Security firms. At the direction of Clinton with some republican friends as well pushed this through, which allowed Citi-Group to aquire Travelers Insurance a multi-billion dollar deal (BTW Citi became the largest contributor to the Clinton Foundation afterwards) This was the beginning of the end and allowed for the mortgaged backed security market to begin and thrive.
Re-institute Glass Steagal, Break apart the large financial groups again and go back to banking, Insurance, and financial firms all divided and doing what they do best, under the regulators of each area.
I agree Glass Steagal should be re-enacted. It is true GLB was pushed through in the middle of the night. I don’t think it was truly bi-partisan. Sen. Phil Gramm (Repub-TX), Rep. Jim Leach (Repub-IA), and Rep. Thomas Bliley Jr. (Repub-VA) were co-sponsors of the GLB ACT. The 106th Combined Congress was led by a Republican majority in the Senate and House of Representatives. Phil Gramm who lobbied hard for this Act, is a senior officer of UBS Investment Bank Division.
Jill,
Roll call – Gramm Leach Bliley Act
Y – 207 Rep 362 Total
Y – 153 Dem
N – 6 Rep 57 Total
N – 50 Dem
And the major contributing factor to the democrat support was the unending push from President Clinton and his inside deal with Citi-Group.
Jill, This was a Bipartisan back door deal including many Republicans and Democrats in a lame duck environment. This had all the makings of a congressional and presidential pardon for financial gain. We all paid a dear price for this blatant bipartisan financial gift to Citi-Group in September 2008. It also had nothing to do with Bush!
It would be interesting to see how many of the politicians received contributions, loans etc. after this legislation.
Agree completely re: appeal, Sarah.
Of course Sarbanes-Oxley is not working. Until there are major prosecutions & convictions, it cannot work. Both parties are owned by
Wall Street, so do not expect any. Paging Mr. Mozillo & Mr. Corzine!
More governmental oversight working? Isn’t that an oxymoron? Just another chance for companies to get crafty and work around the red tape. Companies fail, people lose money. Suck it up people not everyone wins. Diversify or ride one giant wave to it’s doom.
Basic formula: too-big-to-fail = too-big-to-regulate (especially by a bunch of client paid auditors).
Couple this with recent poll data publish (on IJ?) a few days ago that said 27% (+/-) of CFO’s lie on their financial data.
So, not only is the gov’t to big to be an effective regulator of an industry that’s too big/complex to be regulated effectively, these same mid-level G-Men have to be smarter than the Yale/Harvard/Stanford (etc, etc) accountants that are cooking the books and arrogant enough to know that they likely won’t get caught so they have no problems admitting (albeit annonymously) that they are doing it!
Oversight means this: create a law or rule and expect it to be followed. Like enact gun control legislation and expect criminals to abide by it. Its like increasing the penalty for drug use and expect, heroine addicts not to get high.
Break up these institutions and make them live within what they do and nothing else. That is the only thing that will work.