In this AEI Events Podcast, a group of financial experts and historians meet to evaluate the Glass-Steagall Act and the extent to which it can address current and upcoming challenges in American finance in an event hosted by AEI’s Paul H. Kupiec. In the keynote address, Dr. Richard Sylla (New York University Stern School) points out that the real problem of the financial banks was shadow banks – not universal banks – which the Glass-Steagall Act would fail to address.

In a following panel discussion, experts assess the prospects of passing the Glass-Steagall Act, in addition to the implications for banks and their respective bank holding companies. Panelists include Martin Baily, (The Brookings Institution), Oliver Ireland (Morrison and Foerster LLP), Paul H. Kupiec (AEI), and Norbert Michel (The Heritage Foundation). The discussion is moderated by Alex J. Pollock (R Street Institute).

This event took place on June 1, 2017.

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Published in: Culture, Economics

There are 4 comments.

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  1. I Walton Member
    I Walton
    @IWalton

    this is an important podcast and well worth listening to.

    • #1
  2. Texmoor Coolidge
    Texmoor
    @Texmoor

    That was a great discussion. Who knew talking about banking for 2 hours could be so interesting :P

    I find it ironic that D’s these days keep bringing back policy proposals from the New Deal era to address today’s problems, e.g. Net Neutrality (regulating the internet like Ma Bell) and Glass-Steagall (turning back the hands of time on the banking industry). It is rather conservative of them :)

    • #2
  3. Goldwaterwoman Thatcher
    Goldwaterwoman
    @goldwaterwoman

    I listened to the entire thing and was disappointed that they had no arguments from the panelists to bring back Glass-Steagall. It would have been much more informative to hear both sides of the issue. It’s hard to believe they couldn’t find anyone to make the counter argument.

    • #3
  4. I Walton Member
    I Walton
    @IWalton

    Goldwaterwoman (View Comment):
    I listened to the entire thing and was disappointed that they had no arguments from the panelists to bring back Glass-Steagall. It would have been much more informative to hear both sides of the issue. It’s hard to believe they couldn’t find anyone to make the counter argument.

    They say they tried, maybe the people who favor it are just politicians.  The guy in the audience made an articulate case, but they blew him away.  I’d have liked to hear more like that.  That McCain and Warner are co sponsors indicates it’s probably a bad idea. The weakness in the group struck me as too much confidence in theory and diversification of risks.  We know the thirty somethings smelling new big wealth seriously erode that diversification though their herd mentality.    Some hit on the importance of incentives, but that wasn’t developed as well as it might have been.  Yes they lost their bonuses but how many paid big fines or lost previous bonuses or went to jail?   Financial institutions and their people  still get the upside and pass the downside to others.  That must be fixed and I’ve heard others develop the increased capital requirement as key, but capital that is part of every loan.  They dismissed this as just raising costs.  Indeed that is necessary because the illusion of low cost finance is just that, an illusion.  The present value of the probable collapse is a cost we’ve got to figure out how to include.

    • #4
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