Time to break up the banks
So now we have the news that Barack Obama wants to get tough with Wall Street and ensure that banks that borrow and lend do not engage in speculation and risk. Effectively this is a return to the sort of regime introduced by the Glass-Steagall Act of 1933 – a response to the Great Depression.
Sixteen months ago when I did a posting on the global financial crisis, one of the things I called for was “separation of retail banks and investment banks”.
So it’s good to see Obama moving – although whether he can get his measures through a Congress whose members look to financial institutions for much of their election funding must be problematical. But want about here in the UK? What is the response of Gordon Brown and Alistair Darling to the cry for institutional reform?