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War Veteran’s Fund Losses Explain Glass-Steagall

Dec. 7 (Bloomberg) -- One of the great debates to emerge from the financial crisis is whether the U.S. Congress should resurrect some form of the Depression-era Glass-Steagall Act and bring back the separation of commercial and investment banking. It should, but not for the reasons usually cited.

Put aside the tired arguments about whether the law’s repeal in 1999 caused the crisis. It did help banks deemed too big to fail get larger, but the crisis had no single proximate cause. We would have systemically dangerous financial institutions even if the law had stayed in place.