HOUSE BILL: The 21st Century Glass-Steagall Act (Passed)

[Southern Senator North Carolina Yankee]

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Sponsor: NC Yankee
House Designation: HB 1108

[Southern Senator North Carolina Yankee]

This is based off of the Warren bill from 2013.

I of course paired it down to Atlasian style legislation. So Section II, might need a little beefing up, but the idea is pretty basic. To separate bank lending from investment banking.

[Southern Senator North Carolina Yankee]

I could have sworn we had Laborites in this House. 



Guess I was mistaking!  Or maybe they are all DLC Laborites who love them some Wall Street cheese!

[Southern Senator North Carolina Yankee]

Yes, A BODY!!! SOCIAL ACTIVITY!!!!!!

Well, I think that this is a great first step. Not enough, but a great first step.

Well I am leery of going too comprehensive here. Because you have seen the response so far. It might be worth it to beef up section 2, because I really condensed that down. So to further establish the degrees of separation might need to step back a bit on the condensing.

[Southern Senator North Carolina Yankee]

Yeah I agree with Simossad. This is a step in the right direction, but there is a risk.

What kind of risk?

[Southern Senator North Carolina Yankee]

Still waiting!

[Southern Senator North Carolina Yankee]

So Yankee, are you confident that bringing back the Glass-Steagall Act will prevent or alleviate a financial crisis?

Alone, no.


As part of a larger sea change, yes.

The damage of the crisis was the crippling effect it had on credit markets because institutions were so large and had taken such risks, forcing the need for a bailout or all lending would cease. This bailout then created the perverse incentive to encourage future risk taking because now they think tax payers will bail them out again. We have seen subsequent scandals and it only takes a small glance to see that the situation and culture has not changed much at all. Therefore it is only a matter of time and I don't think Dodd-Frank is going to be enough. For one I have always been suspicious of Dodd-Frank in a Bernie Sanders kind of way. Both were greased by Wall Street, one of them had a below market loan from Countrywide Financial, and both filibustered/opposed reforms to Fannie Mae and Freddie Mac pushed by McCain and ironically the Bush administration for 5 years, only to turn around in 2008 and hypocritically demand to know why the aforementioned administration had no plan to deal with Fannie and Freddie. Needless to say, I don't trust the work of the Wall Street wing of the Democratic Party to save us. The sheer complexity of the package has done more to enshrine too big too fail and too little has been done to break up or shrink these institutions and the consolidation of assets into fewer and fewer firms is by far the biggest risk factor you have and the one that should have been prioritized, and the alone that should scare the hell of anybody.

Restoring this as a first step will enable us to start breaking the big too big to fail firms apart into smaller entities that will be more manageable and therefore enable the markets to hold people accountable for bad financial decisions, without it tanking the rest of the economy or financial sector.

As I said before there are other steps that will need to be taken to further prevent this. I think some of the biggest risk factors for collapse came from the lack of accurate financial ratings, poorly set leveraging requirements and the floodgates of new financial products in the ten years leading up to that event, following the massive deregulation that occurred in the late 1990's. These will have to be done in a separate, subsequent bill. One that I am presently gearing up for in the next congress.

The roll of Glass-Steagall is too fold, by separating bank lending and investment banking, you not only shrink the size of firms by definition, you also remove a perverse incentive. Bank lending is FDIC insured, or at least the deposits are, which creates a false sense of security and culture within these amalgamated institutions that bailouts are institutionalized because the strain on the FDIC of such a firm going insolvent would lead either Congress or the Fed to swoop in and provide the golden parachute as it were. With them separated, you begin to create a culture that accepts the reality that every risk could lead to failure and therefore they better avoid too much risk, otherwise it is curtains.

The people at Lehman Brother's thought they would be bailed out and despite all the warning signs, kept making bad decisions.

[Southern Senator North Carolina Yankee]

I plan to make one last review of the text and consider any changes at that point, otherwise when I get back on I plan to start wrapping this up.

[Southern Senator North Carolina Yankee]

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[Southern Senator North Carolina Yankee]

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Sponsor Feedback: Origination
Status: Representatives have 24 hours to object.

[Southern Senator North Carolina Yankee]

The amendment H6:03 has been adopted.

[Southern Senator North Carolina Yankee]

A final vote is now open on the underlying legislation, Representatives, please vote Aye, Nay or Abstain.

[Southern Senator North Carolina Yankee]

AYE

[Southern Senator North Carolina Yankee]

This vote ends tomorrow morning!!!

[Southern Senator North Carolina Yankee]

So is this passed or what

It passed.


I was waiting for a chance to get on this computer again to to do certification and stuff.

[Southern Senator North Carolina Yankee]

Vote on Final House Passage of The 21st Century Glass-Steagall Act:

Aye (5): Clyde1998, OneJ_, NC Yankee, Pessimistic Antineutrino, and Simossad
Nay (1): Dereich
Abstain (0):

Didn't vote (3): Leinad, Peebs and Santander.

The bill has passed the chamber, with majority in favor and time having expired.

[Southern Senator North Carolina Yankee]

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People's House of Representatives
Passed 5-1, in the Atlasian House Assembled,

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