Those that forget history are truly condemned to repeat it. This is from the May 1995 issue of Washington Monthly
Posted by
Brian (aka trav007)
Feb 15 '09, 18:21
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in an article discussing the S&L crisis, our last major banking crisis in the US:
"Now, a Congress infected with a missionary zeal for deregulation is preparing to repeal the Depression-era Glass-Steagall law, which erected walls beween commercial and investment banks to contain the risks that federally insured institutions could take. At minimum, the legislation before Congress will allow any bank to underwrite securities; at most, it will allow any commercial institution to own a bank.
We all ought to be a little nervous. The government still guarantees $100,000 in federal deposit insurance per person, per institution. If a bank should play the market, and the market crash, as it did in 1987, you could be left holding the bag. "As long as any institution can offer insured accounts and pursue risky activities," the National Commission on Financial Reform, Recovery, and Enforcement warned in 1993, "taxpayers could be vulnerable to some future set of 'unique' circumstances and events that could grow into another debacle."
Tell that to the banks. "We think we ought to be able to offer all financial services ... and to do so in a manner that isn't loaded up with a bunch of regulatory restrictions," says Edward Yingling of the American Bankers Association. Flushed with record profits, banks are pushing for "regulatory relief" and expanded powers. They have more than 100 lobbyists helping them do it. They've given nearly two million dollars to members of the House Banking Committee since 1991. And every other financial industry is gearing up to get on the bus.
"We're here to educate them," says Ron Ence of the Independent Bankers Association of America about the Banking Committee and its 15 freshmen. In fact, some of the lobbyists who are now busy "educating" Congress are the same ones who lobbied so effectively, and so destructively, in the early eighties.
Maybe the taxpayers ought to hire lobbyists, too. At least then we would stand a chance."
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