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Nir Kaissar

Don't Pine for Glass-Steagall

The Depression-era law was never the bulwark it was made out to be nor is its return the solution to better stability.

Main Street doesn’t ordinarily concern itself with the minutiae of banking regulation, but ever since the 2008 financial crisis, one Depression-era banking law has stuck in the public imagination but probably shouldn't.

I’m talking about Glass-Steagall, the 1933 law that separated commercial and investment banking. Main Street contends that its repeal in 1999 contributed to -- or even caused -- the near-collapse of the financial system and that it should be resurrected. Wall Street, of course, disagrees.