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Obama Attempting To Reinstate Glass-Steagall Measures

President Obama intends to reinstate 1932 limits of bank risk-taking. 

On November 12, 1999, backed by a 90-8 Senate vote, and a 362-57 House vote, President Clinton repealed the Glass-Steagle Act. For the better part of twenty years, the banks lobbied to have this act repealed.

This repeal de-regulated the distinctions between loans, securities and deposits. 

Before the Glass-Steagall Act was repealed, about 5% of loans were subprime. In 2008, subprime loans peaked at nearly 30%.

The repeal of this act allowed the design and underwriting of mortgage-backed securities and collaterized debt obligations.    

Republican, John McCain, and past Chairman of the Federal Reserve, Paul Voker, advocate the re-instating of some form of this act.

It will be intriguing to how this plays out. Especially in how it appears that President Obama now has the big banks in his crosshairs.

Below is a CNBC article that infers President Obama's intentions.
 
http://www.cnbc.com/id/34966230


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