(November 5) – “Congress
approved landmark legislation on
Thursday that opens the door for a
new era on Wall Street in which
commercial banks, securities houses
and insurers will find it easier
and cheaper to enter one another’s
businesses,” The New York Times
is reporting this morning.
“The measure, considered by many
the most important banking
legislation in 66 years, was
approved in the Senate by a vote of
90 to 8 and in the House Thursday
night by 362 to 57. The bill will
now be sent to the president, who
is expected to sign it, aides
said.
“It would become one of the
most significant achievements this
year by the White House and the
Republicans leading the 106th
Congress.
“The decision to repeal the
Glass-Steagall Act of 1933 provoked
dire warnings from a handful of
dissenters that the deregulation
of Wall Street would someday wreak
havoc on the nation’s financial
system. The original idea behind
Glass-Steagall was that separation
between bankers and brokers would
reduce the potential conflicts of
interest that were thought to have
contributed to the speculative
stock frenzy before the
Depression.
“Thursday’s action followed a
rich Congressional debate about
the history of finance in America
in this century, the causes of the
banking crisis of the 1930’s, the
globalization of banking and the
future of the nation’s economy.
“Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under
existing law. Many foreign banks
already enjoy the ability to enter
the securities and insurance
industries.
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