Glass–Steagall Legislation

This article is about four specific provisions of the Banking Act of 1933, which is also called the Glass-Steagall Act. For other uses, see Glass–Steagall (disambiguation).

The term Glass–Steagall Act usually refers to four provisions of the U.S. Banking Act of 1933 that limited commercial bank securities activities and affiliations within commercial banks and securities firms. Congressional efforts to “repeal the Glass–Steagall Act” referred to those four provisions (and then usually to only the two provisions that restricted affiliations between commercial banks and securities firms). Those efforts culminated in the 1999 Gramm–Leach–Bliley Act (GLBA), which repealed the two provisions restricting affiliations between banks and securities firms.

The term Glass–Steagall Act is also often used to refer to the entire Banking Act of 1933, after its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama. This article deals with only the four provisions separating commercial and investment banking. The article 1933 Banking Act describes the entire law, including the legislative history of the Glass-Steagall provisions separating commercial and investment banking. A separate 1932 law also known as the Glass–Steagall Act is described in the article Glass–Steagall Act of 1932.

Starting in the early 1960s federal banking regulators interpreted provisions of the Glass–Steagall Act to permit commercial banks and especially commercial bank affiliates to engage in an expanding list and volume of securities activities. By the time the affiliation restrictions in the Glass–Steagall Act were repealed through the GLBA, many commentators argued Glass–Steagall was already “dead.” Most notably, Citibank’s 1998 affiliation with Salomon Smith Barney, one of the largest US securities firms, was permitted under the Federal Reserve Board’s then existing interpretation of the Glass–Steagall Act. President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate."

Many commentators have stated that the GLBA’s repeal of the affiliation restrictions of the Glass–Steagall Act was an important cause of the late-2000s financial crisis. Some critics of that repeal argue it permitted Wall Street investment banking firms to gamble with their depositors' money that was held in affiliated commercial banks. Others have argued that the activities linked to the financial crisis were not prohibited (or, in most cases, even regulated) by the Glass–Steagall Act. Commentators, including former President Clinton in 2008 and the American Bankers Association in January 2010, have also argued that the ability of commercial banking firms to acquire securities firms (and of securities firms to convert into bank holding companies) helped mitigate the financial crisis.

The sponsors

Sen. Carter Glass (D–Va.) and Rep. Henry B. Steagall (D–Ala.-3), the co-sponsors of the Glass–Steagall Act.

The sponsors of both the Banking Act of 1933 and the Glass-Steagall Act of 1932 were southern Democrats: Senator Carter Glass of Virginia (who in 1932 had been in the House, Secretary of the Treasury, or in the Senate, for the preceding 30 years), and Representative Henry B. Steagall of Alabama (who had been in the House for the preceding 17 years).

Legislative history of the Glass–Steagall Act

Main article: 1933 Banking Act

The article on the 1933 Banking Act describes the legislative history of that Act, including the Glass–Steagall provisions separating commercial and investment banking. As described in that article, between 1930 and 1932 Senator Carter Glass (D-VA) introduced several versions of a bill (known in each version as the Glass bill) to regulate or prohibit the combination of commercial and investment banking and to establish other reforms (except deposit insurance) similar to the final provisions of the 1933 Banking Act. On June 16, 1933, President Roosevelt signed the bill into law. Glass originally introduced his banking reform bill in January 1932. It received extensive critiques and comments from bankers, economists, and the Federal Reserve Board. It passed the Senate in February 1932, but the House adjourned before coming to a decision. The Senate passed a version of the Glass bill that would have required commercial banks to eliminate their securities affiliates. The final Glass–Steagall provisions contained in the 1933 Banking Act reduced from five years to one year the period in which commercial banks were required to eliminate such affiliations. Although the deposit insurance provisions of the 1933 Banking Act were very controversial, and drew veto threats from President Franklin Delano Roosevelt, President Roosevelt supported the Glass–Steagall provisions separating commercial and investment banking, and Representative Steagall included those provisions in his House bill that differed from Senator Glass’s Senate bill primarily in its deposit insurance provisions. Steagall insisted on protecting small banks while Glass felt that small banks was the weakness to U.S. banking.

As described in the 1933 Banking Act article, many accounts of the Act identify the Pecora Investigation as important in leading to the Act, particularly its Glass–Steagall provisions, becoming law. While supporters of the Glass–Steagall separation of commercial and investment banking cite the Pecora Investigation as supporting that separation, Glass–Steagall critics have argued that the evidence from the Pecora Investigation did not support the separation of commercial and investment banking.

This source states that Senator Glass proposed many versions of his bill to Congress known as the Glass Bills in the two years prior to the Glass-Steagall Act being passed. It also includes how the deposit insurance provisions of the bill were very controversial at the time, which almost led to the rejection of the bill once again.

The previous Glass Bills before the final revision all had similar goals and brought up the same objectives which were to separate commercial from investment banking, bring more banking activities under Federal Reserve supervision and to allow branch banking. In May 1933 Steagall’s addition of allowing state chartered banks to receive federal deposit insurance and shortening the time in which banks needed to eliminate securities affiliates to one year was known as the driving force of what helped the Glass-Steagall act to be signed into law.

The Glass–Steagall provisions separating commercial and investment banking

Main article: Glass–Steagall: legislation, limits and loopholes

The Glass–Steagall separation of commercial and investment banking was in four sections of the 1933 Banking Act (sections 16, 20, 21, and 32). The Banking Act of 1935 clarified the 1933 legislation and resolved inconsistencies in it. Together, they prevented commercial Federal Reserve member banks from:

• dealing in non-governmental securities for customers
• investing in non-investment grade securities for themselves
• underwriting or distributing non-governmental securities
• affiliating (or sharing employees) with companies involved in such activities

Conversely, Glass-Steagall prevented securities firms and investment banks from taking deposits.

The law gave banks one year after the law was passed on June 16, 1933 to decide whether they would be a commercial bank or an investment bank. Only 10 percent of a commercial bank's income could stem from securities. One exception to this rule was that commercial banks could underwrite government issued bonds.

There were several “loopholes” that regulators and financial firms were able to exploit during the lifetime of Glass-Steagall restrictions. Aside from the Section 21 prohibition on securities firms taking deposits, neither savings and loans nor state charted banks that did not belong to the Federal Reserve System were restricted by Glass-Steagall. Glass-Steagall also did not prevent securities firms from owning such institutions. S&Ls and securities firms took advantage of these loopholes starting in the 1960s to create products and affiliated companies that chipped away at commercial banks' deposit and lending businesses.

While permitting affiliations between securities firms and companies other than Federal Reserve member banks, Glass-Steagall distinguished between what a Federal Reserve member bank could do directly and what an affiliate could do. Whereas a Federal Reserve member bank could not buy, sell, underwrite, or deal in any security except as specifically permitted by Section 16, such a bank could affiliate with a company so long as that company was not “engaged principally” in such activities. Starting in 1987, the Federal Reserve Board interpreted this to mean a member bank could affiliate with a securities firm so long as that firm was not “engaged principally” in securities activities prohibited for a bank by Section 16. By the time the GLBA repealed the Glass-Steagall affiliation restrictions, the Federal Reserve Board had interpreted this “loophole” in those restrictions to mean a banking company (Citigroup, as owner of Citibank) could acquire one of the world’s largest securities firms (Salomon Smith Barney), as described in the article Glass–Steagall: decline.

By defining commercial banks as banks that take in deposits and make loans and investment banks as banks that underwrite and deal with securities the Glass Steagall act explained the separation of banks by stating that commercial banks could not deal with securities and investment banks could not own commercial banks or have close connections with them. With the exception of commercial banks being allowed to underwrite government issued bonds, commercial banks could only have ten percent of their income come from securities.

The Glass Steagall Legislation page specifies that only Federal Reserve member banks were affected by the provisions which according to secondary sources the act “applied direct prohibitions to the activities of certain commercial banks

Glass–Steagall decline & effective repeal

Main article: Glass–Steagall: decline

It was not until during 1933 that the separation of commercial bank and investment bank was considered controversial. There was a belief that the separation would lead to a healthier financial system. Later on, over the years the separation became controversial. By 1935 Senator Glass himself attempted to “repeal” the prohibition on direct bank underwriting by permitting a limited amount of bank underwriting of corporate debt.

In the 1960s the Office of the Comptroller of the Currency issued aggressive interpretations of Glass-Steagall to permit national banks to engage in certain securities activities. Although most of these interpretations were overturned by court decisions, by the late 1970s bank regulators began issuing Glass-Steagall interpretations that were upheld by courts and that permitted banks and their affiliates to engage in an increasing variety and amount of securities activities. Starting in the 1960s banks and non-banks developed financial products that blurred the distinction between banking and securities products, as they increasingly competed with each other.

Separately, starting in the 1980s Congress debated bills to repeal Glass-Steagall’s affiliation provisions (Sections 20 and 32). In 1999 the Gramm–Leach–Bliley Act repealed those provisions.

These and other developments are described in detail in the main article, Glass–Steagall: decline, under the following topic headings:

• Glass–Steagall developments from 1935 to 1991
  • Senator Glass’s “repeal” effort
  • Comptroller Saxon’s Glass–Steagall interpretations
  • 1966 to 1980 developments
    • Increasing competitive pressures for commercial banks
    • Limited congressional and regulatory developments
  • Reagan Administration developments
    • State non-member bank and nonbank bank “loopholes”
    • Legislative response
    • International competitiveness debate
    • 1987 status of Glass–Steagall debate
  • Section 20 affiliates
  • Greenspan-led Federal Reserve Board
  • 1991 Congressional action and “firewalls”
  • 1980s and 1990s bank product developments
    • Securitization, CDOs, and “subprime” credit
    • ABCP conduits and SIVs
    • OTC derivatives, including credit default swaps

• Glass–Steagall development from 1995 to Gramm–Leach–Bliley Act of 1999.
  • Leach and Rubin support for Glass–Steagall “repeal”; need to address “market realities”
  • Status of arguments from 1980s
  • Failed 1995 Leach bill; expansion of Section 20 affiliate activities; merger of Travelers and Citicorp
  • 1997-98 legislative developments: commercial affiliations and Community Reinvestment Act
  • 1999 The Gramm–Leach–Bliley Act (GLB Act), also known as the Financial Services Modernization Act of 1999, repealed part of the Glass–Steagall Act (GS Act) of 1933. The GS Act had prohibited any one financial institution from acting as any combination of an investment/security firm, a commercial bank and an insurance brokerage; therefore, the GLB Act removed the barriers which the GS Act had established upon the financial institutions in the 1930s for acting as any combination of an investment/ security firm, a commercial bank and an insurance brokerage: Thus, with the passage of the GLB Act, any one financial institution—after combining any of the following:

1. an investment/ security firm, 2. a commercial bank and 3. an insurance brokerage—could act as the combination of those financial entities. That is to say, these three separate, financial entities no longer had to be separate with the passage of the GLB Act. The legislation was signed into law by President Bill Clinton.

Aftermath of repeal

Main article: Glass–Steagall: Aftermath of repeal

Because the Federal Reserve’s interpretations of Glass–Steagall Sections 20 and 32 had weakened those restrictions, commentators did not find much significance in the repeal of those sections. Instead, the five year anniversary of their repeal was marked by numerous sources explaining that the GLBA had not significantly changed the market structure of the banking and securities industries. More significant changes had occurred during the 1990s when commercial banking firms had gained a significant role in securities markets through “Section 20 affiliates.” After the financial crisis of 2007–08, however, many commentators argued that the repeal of Sections 20 and 32 had played an important role in leading to the crisis. Other commentators argued that the repeal had helped end, or mitigate, the crisis.

The main article on this subject, Glass–Steagall: Aftermath of repeal, has sections on:

• Commentator response to Section 20 and 32 repeal
• Financial industry developments after repeal of Sections 20 and 32
• Glass–Steagall “repeal” and the financial crisis

It also mentions that in the 1960s the Office of the Comptroller of the Currency made the Glass Steagall Act allow national banks to engage in a variety amount of securities actitivites. In the essay by Neely, from the federal reserve history website, she also mentions the important information presented above but expanded with it more. For example, she expands on what banks can underwrite which includes commercial paper, mortgage-backed securities, equity and corporate debt as long as these contribute to a small percentage of their affiliate’s revenue. She also adds that the Office of the Comptroller of the Currency allows banks to engage in mutual fund related activities including discount brokerage services.

Glass Steagall in post-financial crisis reform debate

Main article: Glass–Steagall in post-financial crisis reform debate

Following the financial crisis of 2007-08, legislators unsuccessfully tried to reinstate Glass–Steagall Sections 20 and 32 as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Currently, bills are pending in United States Congress that would revise banking law regulation based on Glass–Steagall inspired principles. Both in the United States and elsewhere banking reforms have been proposed that also refer to Glass–Steagall principles. These proposals raise issues that were addressed during the long Glass–Steagall debate in the United States, including issues of “ring fending” commercial banking operations and “narrow banking” proposals that would sharply reduce the permitted activities of commercial banks.

Please see the main article, Glass–Steagall in post-financial crisis reform debate, for information about the following topics:

• Failed 2009-10 efforts to restore Glass–Steagall Sections 20 and 32 as part of Dodd–Frank
• Post-2010 efforts to enact Glass–Steagall inspired financial reform legislation
• Volcker Rule ban on proprietary trading as Glass–Steagall lite
• Further financial reform proposals that refer to Glass–Steagall
  • UK and EU “ring fencing” proposals
    • Similar issues debated in connection with Glass–Steagall and “firewalls”
  • Limited purpose banking and narrow banking
    • Wholesale financial institutions in Glass–Steagall reform debate
  • Glass–Steagall references in reform proposal debate

See also

• Glass–Steagall: decline
• American International Group
• Arthur Vandenberg
• Commodity Futures Modernization Act of 2000
• Corporate Law
• Global financial crisis of 2008
• Subprime mortgage crisis
• Systemic risk

References

• Barth, James R.; Brumbaugh Jr., R. Dan; Wilcox, James A. (2000), "The Repeal of Glass–Steagall and the Advent of Broad Banking", Journal of Economic Perspectives 14 (2): 191–204, doi:10.1257/jep.14.2.191, retrieved February 16, 2012 .
• Benston, George J. (1990), The Separation of Commercial and Investment Banking: The Glass–Steagall Act Revisited and Reconsidered, New York: Oxford University Press, ISBN 0-19-520830-7 .
• Burns, Helen M. (1974), The American Banking Community and New Deal Banking Reforms, 1933-1935, Westport, CT: Greenwood Press, ISBN 0-8371-6362-5 .
• Capatides, Michael G. (1992), A Guide to the Capital Markets Activities of Banks and Bank Holding Companies, New York: Bowne & Co., OCLC 28542600 .
• Carpenter, David H.; Murphy, M. Maureen (2010a), "Permissible Securities Activities of Commercial Banks Under the Glass–Steagall Act (GSA) and the Gramm-Leach-Bliley Act (GLBA)", Congressional Research Service Report (R41181), retrieved February 10, 2012 .
• Carpenter, David H.; Murphy, M. Maureen (2010b), "The "Volcker Rule": Proposals to Limit "Speculative" Proprietary Trading by Banks", Congressional Research Service Report (R41298), retrieved February 10, 2012 .
• Chapman and Cutler LLP (July 23, 2010), The Volcker Rule in the New Financial Regulation Law (Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010), retrieved February 19, 2012 .
• Cleveland, Harold van B.; Huertas, Thomas F. (1985), Citibank, 1812-1970, Cambridge, MA: Harvard University Press, ISBN 0-674-13175-4 .
• Covington & Burling (November 12, 1999), Financial Modernization: The Gramm-Leach-Bliley Act, Summary, American Bankers Association, retrieved February 24, 2012 .
• D’Artista, Jane W.; Schlesinger, Tom (1993), "The Parallel Banking System", Economic Policy Institute Briefing Paper (37): 1–45, retrieved February 24, 2012 
• Eaton, David M. (1995), "The Commercial Banking-Related Activities of Investment Banks and Other Nonbanks", Emory Law Journal 44 (3): 1187–1226 .
• Federal Deposit Insurance Corporation (1983), The First Fifty Years: A History of the FDIC 1933-1983, retrieved February 24, 2012 .
• Federal Reserve Bank of Philadelphia (1999), "Recent Developments: Financial Services Reform Enacted", Banking Legislation & Policy 18 (4): 1–4, retrieved February 24, 2012 .
• Federal Reserve Board (1987), "Orders Issued Under Section 4 of the Bank Holding Company Act, Citicorp, J.P. Morgan & Co., Incorporated, Bankers Trust New York Corporation", Federal Reserve Bulletin 73 (6): 473–508, retrieved February 24, 2012 .
• Federal Reserve Board (1998), Attachment I to Testimony of Chairman Alan Greenspan before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, June 17, 1998, Summaries of Prior Financial Modernization Legislation Considered and Passed by the Senate Banking Committee Since 1984, retrieved February 24, 2012 .
• Federal Reserve Board and U.S. Department of the Treasury (November 2003), Report to the Congress on Financial Holding Companies under the Gramm–Leach–Bliley Act, pp. 1–43, retrieved February 24, 2012 .
• Federal Reserve Board (2011 update (July)), Bank Holding Company Supervision Manual: "Permissible Activities by Board Order (Section 4(c)(8) of the BHC Act),", retrieved February 24, 2012  .
• Fein, Melanie (2011), Securities Activities of Banks (4th ed.), New York: Wolters Kluwer Law & Business, ISBN 978-0-7355-1860-5 
• Felsenfeld, Carl; Glass, David L. (2011), Banking Regulation in the United States (3d ed.), New York: Juris Publishing, Inc., ISBN 978-1-57823-263-5 .
• Fisher, Keith R. (2001), "Orphan of Invention: Why the Gramm-Leach-Bliley Act was unnecessary", Oregon Law Review 80 (4): 1301–1421, retrieved February 24, 2012 .
• Financial Crisis Inquiry Commission (2011), The Financial Crisis Inquiry Report, Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States, retrieved February 24, 2012 .
• Focarelli, Dario; Marques-Ibanez, David; Pozzolo, Alberto Franco (January 2011), Are Universal Banks Better Underwriters? Evidence From the Last Days of the Glass–Steagall Act, ECB Working Paper Series (No. 1287), European Central Bank, pp. 1–34, retrieved February 25, 2012 .
• Friedman, Milton; Schwartz, Anna Jacobson, A Monetary History of the United States, 1867-1960, Princeton, N.J.: Princeton University Press, ISBN 0-691-00354-8 .
• Garten, Helen (1989), "Regulatory Growing Pains: A Perspective on Bank Regulation in a Deregulatory Age", Fordham Law Review 57 (4): 501–577, retrieved February 24, 2012 .
• Garten, Helen (1991), Why Bank Regulation Failed : Designing a Bank Regulatory Strategy for the 1990s, New York: Quorum Books, ISBN 0-89930-580-6 .
• Garten, Helen (1993), "Universal Banking and Financial Stability", Brooklyn Journal of International Law 19 (1): 159–195, retrieved February 25, 2012 .
• Garten, Helen (1999), "The Consumerization of Financial Regulation", Washington University Law Quarterly 77 (2): 287–318, retrieved February 24, 2012 .
• General Accounting Office (January 1988), "Bank Powers: Issues Related to the Repeal of the Glass–Steagall Act", Report to the Honorable Edward J. Markey, Chairman, Subcommitteeon Telecommunications and Finance, Committee on Energy and Commerce,Houseof Representatives, GAO/GGD-88-37: 1–75, retrieved February 24, 2012 .
• Greenspan, Alan (December 1, 1987), Testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, retrieved February 24, 2012 .
• Greenspan, Alan (April 15, 2010), The Crisis, Washington, D.C.: The Brookings Institution, retrieved February 19, 2012 .
• Hendrickson, Jill M. (2001), "The Long and Bumpy Road to Glass–Steagall Reform: A Historical and Evolutionary Analysis of Banking Legislation", American Journal of Economics and Sociology 60 (4): 849–879, doi:10.1111/1536-7150.00126, retrieved February 24, 2012 .
• Heyward, Peter (2005), Citigroup to Congress: never mind! (some reflections on the Gramm-Leach-Bliley Act prompted by Citigroup’s exit from insurance underwriting), Washington, D.C.: Venable LLP, retrieved February 16, 2012 .
• Independent Commission on Banking (September 2011), Final Report, Recommendations, pp. 1–354, retrieved February 24, 2012 .
• Jackson, William D. (2005), "Industrial Loan Companies/Banks and the Separation of Banking and Commerce: Legislative and Regulatory Perspectives", Congressional Research Service Report (RL32767), retrieved February 11, 2012 .
• Jeannot, Jennifer Manville (1999), "An International Perspective on Domestic Banking Reform: Could the European Union’s Second Banking Directive Revolutionize the Way the United States Regulates Its Own Financial Services Industry?", American University International Law Review 14 (6): 1716–1760, retrieved February 12, 2012 .
• Kavanaugh, Barbara; Boemio, Thomas R. & Edwards, Jr., Gerald A. (1992), "Asset-Backed Commercial Paper Programs", Federal Reserve Bulletin 78 (2): 107–116, retrieved February 27, 2012 .
• Kelly III, Edward J. (1985), "Chapter 2: Legislative History of the Glass–Steagall Act", in Walter, Ingo, Deregulating Wall Street: Commercial Bank Penetration of the Corporate Securities Market, New York: John Wiley & Sons, pp. 41–65, ISBN 0-471-81713-9 .
• Kennedy, Susan Estabrook (1973), 'The Banking Crisis of 1933, Lexington, KY: University Press of Kentucky, ISBN 0-8131-1285-0 .
• Kotlikoff, Laurence J. (2010), Jimmy Stewart is Dead: Ending the World’s Ongoing Financial Plaque with Limited Purpose Banking, John Wiley & Sons, Inc., ISBN 978-0-470-58155-1 .
• Kregel, Jan (2010a), "No Going Back: Why We Can Not Restore Glass–Steagall’s Segregation of Banking and Finance", Public Policy Brief No. 107 (Levy Economics Institute of Bard College): 1–17, retrieved February 11, 2012 .
• Kregel, Jan (2010b), "Can a return to Glass–Steagall provide financial stability in the US financial system", PSL Quarterly Review 63 (252): 37–73, SSRN 1810803 .
• Kurucza, Robert M.; Ballen, Robert G.; McTaggert, Timothy R. (1988), "Securities and Investment Activities of Banks", The Business Lawyer 43 (3): 1107–1121, retrieved February 25, 2012 .
• Langevoort, Daniel C. (1987), "Statutory Obsolescence and the Judicial Process: The Revisionist Role of the Courts in Federal Banking Regulation", Michigan Law Review 85 (4): 672–733, doi:10.2307/1288728, retrieved February 12, 2012 .
• Levitt, Jr., Arthur (June 25, 1998), Prepared Testimony of the Honorable Arthur Levitt, Jr., Chairman, Securities and Exchange Commission, Senate Banking, Housing and Urban Affairs Committee, Hearing on H.R. 10-"The Financial Services Act of 1998", retrieved February 24, 2012 .
• Litan, Robert E. (1987), What Should Banks Do?, Washington, D.C.: Brookings Institution Press, ISBN 0-8157-5270-9 
• Litan, Robert E.; Rauch, Jonathan (1998), American Finance for the 21st Century, Washington, D.C.: Brookings Institution Press, ISBN 0-8157-5288-1 .
• Lockner, Robert; Hansche, Heather (March 22, 2000), "Financial Services Modernization and Corporate Finance", Commercial Lending Review 15 (2): 36–42, retrieved February 24, 2012 
• Macey, Jonathan R. (2000), "The Business of Banking: Before and After Gramm-Leach-Bliley", The Journal of Corporation Law 25 (4): 691–722, retrieved February 25, 2012 .
• Malloy, Michael P. (2011), Banking Law and Regulation (2d ed.), New York: Aspen Publishers, ISBN 978-1-4548-0107-8 .
• Markey, Edward J. (1990), "Why Congress Must Amend Glass–Steagall: Recent Trends in Breaching the Wall Separating Commercial and Investment Banking", New England Law Review 25 (2): 457–475, retrieved February 25, 2012 .
• Mattingly, J. Virgil; Fallon, Keiran J. (1998), "Understanding the Issues Raised by Financial Modernization", North Carolina Banking Institute 2: 25–69, retrieved February 25, 2012 .
• Mayer, Martin (1974), The Bankers, New York: Weybright and Talley, ISBN 0-679-40010-9 .
• Mayer, Martin (1984), 'The Money Bazaars, New York: E.P Dutton, ISBN 0-525-24221-X .
• Mayer, Martin (1997), The Bankers: The Next Generation, New York: Truman Talley Books, ISBN 0-525-93865-6 .
• New Rules Project (2012), The Glass Steagall Act and the Volcker Rule, Institute for Local Self-Reliance, retrieved February 9, 2012 .
• Omarova, Saule T. (2011), "From Gramm-Leach-Bliley to Dodd-Frank: The Unfulfilled Promise of Section 23A of the Federal Reserve Act", North Carolina Law Review 89 (5): 1683–1769, retrieved February 25, 2012 .
• Patrick, Sue C. (1993), Reform of the Federal Reserve System in the Early 1930s: The Politics of Money and Banking, New York: Garland Publishing, Inc., ISBN 0-8153-0970-8 .
• Peach, William Nelson (1941), The Security Affiliates of National Banks, New York: Arno Press Inc. (published 1975 (reprint of the 1941 edition published by Johns Hopkins Press, Baltimore, MD, which was issued as ser. 58, no. 3 of Johns Hopkins University studies in historical and political science, originally presented as the author’s thesis, Johns Hopkins University, 1939)), ISBN 0-405-06984-7  .
• Perino, Michael A. (2010), The Hellhound of Wall Street: How Ferdinand Pecora's Investigation of the Great Crash Forever Changed American Finance, New York: Penguin Press, ISBN 978-1-59420-272-8 
• Perkins, Edwin J. (1971), "The Divorce of Commercial and Investment Banking: A History", Banking Law Journal 88 (6): 483–528 .
• Pitt, Harvey L.; Williams, Julie L. (1983), "The Convergence of Commercial and Investment Banking: New Directions in the Financial Services Industry", Journal of Comparative Business and Capital Market Law 5 (2): 137–193, retrieved February 25, 2012 .
• Reinicke, Wolfgang H. (1995), Banking, Politics and Global Finance: American Commercial Banks and Regulatory Change, 1980-1990, Aldershot, England: Edward Elgar Publishing Limited, ISBN 1-85898-176-X .
• Rodelli, R. Nicholas (1998), "The New Operating Standards for Section 20 Subsidiaries: The Federal Reserve Board’s Prudent March Towards Financial Services Modernization", North Carolina Banking Institute 2: 311–344, retrieved February 14, 2012 .
• Rodkey, Robert G. (1934), "Banking Reform by Statute", Michigan Law Review 32 (7): 881–908, JSTOR 1280817 .
• Shull, Bernard; White, Lawrence J. (May 1998), "Of Firewalls and Subsidiaries: The Right Stuff for Expanded Bank Activities", Journal of Banking Law (forthcoming): 1–17, retrieved February 13, 2012 .
• Simpson Thacher & Bartlett LLP (September 30, 1998), Federal Reserve Approves Merger of Travelers and Citicorp, retrieved February 25, 2012 .
• Stern, Gary (2000), "Thoughts on Designing Credible Policies after Financial Modernization: Addressing too big to fail and moral hazard", The Region-The Federal Reserve Bank of Minneapolis (September): 2–4 and 24–29, retrieved February 25, 2012 .
• Stern, Gary J.; Feldman, Ron J. (2004), Too Big To Fail: The Hazards of Bank Bailouts, Washington, D.C.: Brookings Institution Press, ISBN 0-8157-8152-0 .
• United States Securities and Exchange Commission, Office of Legislative Affairs (June 24, 1994), Timeline of Bank Securities Activities, pp. 1–35, retrieved February 11, 2012 .
• United States Senate, Committee on Banking, Housing, and Urban Affairs (September 18, 1998), Report of the Committee on Banking, Housing, and Urban Affairs, United States Senate, to accompany H.R. 10, together with Additional Views, Government Printing Office, retrieved February 25, 2012 .
• United States Senate, Committee on Banking, Housing, and Urban Affairs (2004), Examination of the Gramm-Leach-Bliley Act Five Years after its Passage, Hearing before the Committee on Banking, Housing, and Urban Affairs, United States Senate, July 13, 2004, Government Printing Office, retrieved February 25, 2012 .
• Vietor, Richard (1987), "Chapter 2: Regulation-Defined Financial Markets: Fragmentation and Integration in Financial Services", in Hayes, Jr., Samuel L., Wall Street and Regulation, Boston: Harvard Business School Press, pp. 7–62, ISBN 0-87584-183-X .
• Volcker, Paul A. (February 25, 1997), Statement before the Subcommittee on Financial Institutions and Consumer Credit, United States House of Representatives, The Committee on Financial Services, United States House of Representatives, retrieved February 25, 2012 .
• Volcker, Paul A. (May 14, 1997), Statement before the Committee on Banking and Financial Services, United States House of Representatives, The Committee on Financial Services, United States House of Representatives, retrieved February 25, 2012 .
• White, Eugene N. (1992), The Comptroller and the Transformation of American Banking, 1960-1990, Washington D.C.: Comptroller of the Currency, OCLC 27088818 .
• Whitehead, Charles K. (2011), "The Volcker Rule and Evolving Financial Markets", Harvard Business Law Review 1 (1): 39–73, retrieved February 19, 2012 .
• Willis, H. Parker (1935), "The Banking Act of 1933 in Operation", Columbia Law Review 35 (5): 697–724, JSTOR 1115748 .
• Wilmarth, Jr., Arthur E. (1990), "The Expansion of State Bank Powers, the Federal Response, and the Case for Preserving the Dual Banking System", Fordham Law Review 58 (6): 1133–1256, retrieved February 25, 2012 .
• Wilmarth, Jr., Arthur E. (1995), "Too Good to Be True - The Unfulfilled Promises behind Big Bank Mergers", Stanford Journal of Law, Business, and Finance 2 (1): 1–88, retrieved February 25, 2012 .
• Wilmarth, Jr., Arthur E. (2001), "How Should We Respond to the Growing Risks of Financial Conglomerates", Public Law and Legal Theory Working Paper (034): 1–89, SSRN 291859 .
• Wilmarth, Jr., Arthur E. (2002), "The Transformation of the U.S. Financial Services Industry, 1975-2000: Competition, Consolidation and Increased Risks", University of Illinois Law Review 2002 (2): 215–476, SSRN 315345 .
• Wilmarth, Jr., Arthur E. (2008), "Did Universal Banks Play a Significant Roe in the U.S. Economy’s Boom-and-Bust Cycle of 1921-33? A Preliminary Assessment", Current Development in Monetary and Financial Law 4, Washington, D.C.: International Monetary Fund, pp. 559–645, ISBN 978-1-58906-507-9, SSRN 838267 .

Further reading

• Anderson, Benjamin (1949), Economics and the Public Welfare, New York: D. Van Nostrand Company .
• Barth, James R.; Brumbaugh, R. Dan, Jr. & Wilcox, James A. (2000), "Policy Watch: The Repeal of Glass–Steagall and the Advent of Broad Banking", Journal of Economic Perspectives 14 (2): 191–204, doi:10.1257/jep.14.2.191, JSTOR 2647102 .
• Blass, Asher A.; Grossman, Richard S. (1998), "Who Needs Glass–Steagall? Evidence From Israel’s Bank Share Crisis and the Great Depression", Contemporary Economic Policy 16 (2): 185–196, doi:10.1111/j.1465-7287.1998.tb00511.x, retrieved February 27, 2012 .
• Burns, Arthur F. (1988), The Ongoing Revolution in American Banking, Washington, D.C.: American Enterprise Institute, ISBN 0-8447-3654-6 .
• Calomiris, Charles W.; White, Eugene N. (1994), "The Origins of Federal Deposit Insurance, chapter 5 in The Regulated Economy: A Historical Approach to Political Economy, edited by Claudia Golden and Gary D. Libecap, Chicago: University of Chicago Press, ISBN 0-226-30110-9", Journal of Comparative Business and Capital Market Law 5 (2): 137–193, retrieved February 27, 2012 .
• Calomiris, Charles W. (2000), U.S. Bank Deregulation in Historical Perspective, New York: Cambridge University Press, ISBN 0-521-58362-4 
• Canals, Jordi (1997), Universal Banking: International Comparisons and Theoretical Perspectives, Oxford; New York: Clarendon Press, ISBN 0-19-877506-7 .
• Coggins, Bruce (1998), Does Financial Deregulation Work? A Critique of Free Market Approaches, New Directions in Modern Economics, Northampton, MA: Edward Elgar Publishing Limited, ISBN 1-85898-638-9 .
• Firzli, M. Nicolas (January 2010), "Bank Regulation and Financial Orthodoxy: the Lessons from the Glass–Steagall Act", Revue Analyse Financière: 49–52  (French).
• Hambley, Winthrop P. (September 1, 9999), "The Great Debate-What will become of financial modernization", Community Investments (Federal Reserve Bank of San Francisco) 11 (2): 1–3, retrieved February 16, 2012  .
• Huertas, Thomas (1983), "Chapter 1: The Regulation of Financial Institutions: A Historical Perspective on Current Issues", in Benston, George J., Financial Services: The Changing Institutions and Government Policy, Englewood Cliffs, N.J.: Prentice-Hall, ISBN 0-13-316513-2 .
• Kroszner, Randall S. & Rajan, Raghuram G. (1994), "Is the Glass–Steagall Act Justified? A Study of the U.S. Experience with Universal Banking Before 1933", American Economic Review 84 (4): 810–832, JSTOR 2118032 .
• Lewis, Toby (January 22, 2010), "New Glass–Steagall Will Shake Private Equity", Financial News .
• Mester, Loretta J. (1996), "Repealing Glass–Steagall: The Past Points the Way to the Future", Federal Reserve Bank of Philadelphia Business Review (July/August), retrieved February 25, 2012 .
• Minsky, Hyman (1982), Can It Happen Again?, Armonk, N.Y.: M.E. Sharpe, ISBN 0-873-32213-4 .
• Mishkin, Frederic S. (2006), "How Big a Problem is Too Big to Fail? A Review of Gary Stern and Ron Feldman’s Too Big to Fail: The Hazards of Bank Bailouts", Journal of Economic Literature 44 (December): 988–1004, doi:10.1257/jel.44.4.988, retrieved February 25, 2012 .
• Pecora, Ferdinand (1939), Wall Street Under Oath: The Story of Our Modern Money Changers, Reprints of Economics Classics, New York: A.M. Kelley (published 1966 (reprint of 1939 edition pubslished by Simon &Schuster, New York )), LCCN 68-20529  .
• Saunders, Anthony; Walter, Ingo (1994), Universal Banking in the United States: What could we gain? What could we lose?, New York: Oxford University Press, ISBN 0-19-508069-6 .
• Saunders, Anthony; Walter, Ingo, eds. (1997), Universal Banking: Financial System Design Reconsidered, Chicago: Irwin Professional Publishing, ISBN 0-7863-0466-9 .
• Uchitelle, Louis (February 16, 2010), "Elders of Wall St. Favor More Regulation", New York Times .
• White, Eugene Nelson (1986), "Before the Glass–Steagall Act: An analysis of the investment banking activities of national banks", Explorations in Economic History 23 (1): 33–55, doi:10.1016/0014-4983(86)90018-5 .
• Willis, Henry Parker; Chapman, John (1934), The Banking Situation: American Post-War Problems and Developments, New York: Columbia University Press, OCLC 742920 .
• Wilmarth, Jr., Arthur E. (2007), "Walmart and the Separation of Banking and Commerce", Connecticut Law Review 39 (4): 1539–1622, SSRN 984103 .

External links

• Glass–Steagall Act – further readings
• On the systematic dismemberment of the Act from PBS's Frontline
• Full text of the Glass–Steagall Act followed by New York Federal Reserve Bank Explanation
• Glass Subcommittee hearings
• Pecora Investigation hearings
• FDIC History: 1933-1983
• 1987 Federal Reserve Bank of Kansas City Jackson Hole Symposium on Restructuring the Financial System
• Public Law 73-66, 73d Congress, H.R. 5661: an Act to Provide for the Safer and More Effective Use of the Assets of Banks, to Regulate Interbank Control, to Prevent the Undue Diversion of Funds into Speculative Operations
• [1] The Southeast Missourian, March 10, 1933 details legislative debate when passing the bill