Courtesy of Pam Martens.
Creating a timeline of some of the major voices and media that are now calling for the restoration of the Glass-Steagall Act, separating Wall Street trading firms from commercial banking, exposes interesting new insights. Most notably, the New York Times editorial page did not admit its mistake in supporting the repeal of the legislation, or offer an apology to the public, until Sandy Weill had effectively given the break-up of banks his blessing on CNBC. Why is it that the New York Times needed the nudge from Weill.
Also insightful is the Bill Moyers’ interview with John Reed, who co-chaired Citigroup with Sandy Weill. Reed candidly confirms what many of us have suspected for a long time. Repealing the legislation that had kept the financial system safe for almost seven decades was motivated by visions dancing around in Weill’s head of getting very rich.
And finally, we learn from the July 27, 2012 editorial in the Financial Times that the very lobbying machine that the newly reformed reformers help put in place, may be the greatest threat to restoring Glass-Steagall.
Excerpts from some of the milestones along the path to restoring Glass-Steagall:
May 2011: Restructuring the Banking System to Improve Safety and Soundness, By Thomas M. Hoenig, President and CEO, Federal Reserve Bank of Kansas City, and Charles S. Morris, Vice President and Economist, Federal Reserve Bank of Kansas City
“This proposal to reduce costs and risks to the safety net and financial system has two parts. The first part proposes to restrict bank activities to the core activities of making loans and taking deposits and to other activities that do not significantly impede the market, bank management, and regulators in assessing, monitoring, and/or controlling bank risk taking. However, prohibiting banks from engaging in activities that do not meet these criteria and that threaten financial stability would provide limited benefits if those activities migrate to shadow banks. The second part proposes changes to the shadow banking system by making recommendations to reform money market funds and the repo market.”
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