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> With all the demonizing of wall street in regards to the 2008 crisis, most fail to go back to the true cause of the crisis, i.e. the repeal of the Glass-Stega
by chimeracoder 8y ago
> With all the demonizing of wall street in regards to the 2008 crisis, most fail to go back to the true cause of the crisis, i.e. the repeal of the Glass-Stegall Act[2] via the Gramm-Leach-Bliley Act[3] signed by President Clinton in 1999. It took almost a decade but the entire "too big to fail" concept grew from that repeal.
As pointed out elsewhere, the repeal of Glass-Stegall was not the problem. Not only do most other countries not even have an equivalent law, but the crisis was triggered when a standalone investment bank failed.
- koolba 8y agoIt didn't cause the root problem but it contributed greatly to it ballooning beyond a handful of investment banks to main street ones. Interestingly it was also involved in the solution as it allowed some of the mergers that softened the collapse.